Right to Buy

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pages: 325 words: 89,374

Municipal Dreams: The Rise and Fall of Council Housing by John Boughton

British Empire, deindustrialization, full employment, garden city movement, ghettoisation, housing crisis, Jane Jacobs, laissez-faire capitalism, manufacturing employment, negative equity, Neil Kinnock, neoliberal agenda, new economy, New Urbanism, profit motive, rent control, Right to Buy, rising living standards, starchitect, The Death and Life of Great American Cities, the market place, upwardly mobile, urban decay, urban planning, urban renewal, young professional

While they were not enforced on private developers, Labour’s Housing Minister Anthony Greenwood made it clear he saw this mandate as a significant contribution to a universal and ongoing improvement in housing quality: I think most people would agree that the Parker Morris house is a very good house indeed; and – although we can look for even higher standards in the future, since standards are always rising – there is no doubt that the objectives which we have now set represent by far the most significant improvement in housing standards at least since the war, and probably since local authorities began building houses to rent.30 Despite this, home ownership was increasingly adjudged the significant metric of progress; in fact, Labour’s own 1959 general election manifesto proposed a Right to Buy for sitting council tenants. Overall, the proportion of owner-occupied households rose from 32 per cent in 1953 to 43 per cent in 1961. That trend had its own longer-term implications for the status of council housing, but the most immediate and pressing issue was the vast numbers of British people still living in slum conditions – by some estimates 4.7 million households still lived in unfit or substandard homes.

., ‘A Qualitative Study of the Impact of the UK “Bedroom Tax”’, 202. 26Andrew Adonis and Bill Davies (eds), City Villages: More Homes, Better Communities (IPPR, March 2015), 9, ippr.org, accessed 8 May 2017. 27Yolande Barnes, ‘A City Village Approach to Regenerating Housing Estates’, in Adonis and Davies (eds), City Villages, 56. 28Jules Pipe and Philip Glanville, ‘Hackney City Villages’, in Adonis and Davies (eds), City Villages, 82. 29Duncan Bowie, ‘City Villages – The Wrong Solution to London’s Housing Crisis’, Red Brick, 12 January 2016, redbrickblog.wordpress.com, accessed 8 May 2017. 30Savills Research Report to Cabinet Office, Completing London’s Streets: How the Regeneration and Intensification of Housing Estates Could Increase London’s Supply of Homes and Benefit Residents, January 2016, 5, pdf.euro.savills.co.uk, accessed 8 May 2017. 31Caroline Davies, ‘David Cameron Vows to “Blitz” Poverty by Demolishing UK’s Worst Sink Estates’, Guardian, 10 January 2016, theguardian.com, accessed 8 May 2017. 32David Cameron, Estate Regeneration, 10 January 2016, gov.uk, accessed 8 May 2017. 33Haringey Council’s Local Plan Consultation: Response by Broadwater Farm Residents’ Association (24 March 2015), 7, haringey.gov.uk, accessed 9 May 2017. 34Iain Duncan Smith, ‘We Cannot Arrest Our Way Out of These Riots’, Times, 15 September 2011, thetimes.co.uk, accessed 9 May 2017. 35Cameron, Estate Regeneration. 36Space Syntax, 2011 London Riots Location Analysis: Proximity to Town Centres and Large Post-War Housing Estates (2011), image.guardian.co.uk, accessed 9 May 2017. 37Reading the Riots: Investigating England’s Summer of Disorder (Guardian and the London School of Economics, 2011), 4, eprints.lse.ac.uk, accessed 9 May 2017. 38Bob Jeffery and Waqas Tufail, ‘“The Riots Were Where the Police Were”: Deconstructing the Pendleton Riot’, Contention: The Multidisciplinary Journal of Social Protest, vol. 2, no. 2, October 2016, 53, shura.shu.ac.uk, accessed 9 March 2017. 39Social Life, Cressingham Gardens Estate, October 2013, social-life.co, accessed 10 May 2017. 40Save Cressingham Gardens, Petition: Stop Mott MacDonald Profiting from Community Destruction, 6 May 2017, savecressingham.wordpress.com, accessed 10 May 2017. 41Barnet Council, ‘West Hendon Estate, West Hendon, London NW9: Application Summary’, 17 December 2014, barnet.moderngov.co.uk, accessed 13 June 2017. 42Dave Hill, ‘Jasmin Parsons and the Troubled Tale of the West Hendon Estate’, Guardian, 4 November 2015, theguardian.com, accessed 13 June 2017. 43Chris Godfrey, ‘How Council Promises Have Fallen Away, Leaving the West Hendon Estate in Dire Straits’, New Statesman, 28 January 2015, newstatesman.com, accessed 10 May 2017. 44James Caven, ‘“You Are Displacing a Whole Community”: Public Inquiry into West Hendon Estate Starts’, Hendon and Finchley Times, 20 January 2015, times-series.co.uk, accessed 13 June 2017. 45Dave Hill, ‘Earls Court Regeneration: Reviews and Uncertainties’, Guardian, 3 October 2016, theguardian.com, accessed 10 May 2017. 46West Ken and Gibbs Green – The People’s Estates, ‘Residents Launch People’s Plan for Improvements and New Homes Without Demolition’, 21 July 2016, westkengibbsgreen.wordpress.com, accessed 10 May 2017. 47Sam Gelder, ‘Northwold Estate Campaigners Fight Developers over Demolition of Housing Blocks’, Hackney Gazette, 30 November 2016, hackneygazette.co.uk, accessed 11 May 2017. 48Shelter, Shelter’s Response to the CLG’s Consultation – Reform of Council Housing Finance, October 2009, 6, england.shelter.org.uk, accessed 12 May 2017. 49Price Waterhouse Cooper, HRA Reform: One Year On, July 2013, 2, pwc.co.uk, accessed 12 May 2017. 50Janice Morphet, ‘Is Austerity the Mother of Invention? How Local Authorities are Providing Housing Again’, LSE British Politics and Policy, blogs.lse.ac.uk, accessed 11 May 2017. 51UK Government, ‘Table 600: Numbers of Households on Local Authorities’ Housing Waiting Lists, by District, England, from 1997’, gov.uk, accessed 11 May 2017. 52Michael Buchanan and Sophie Woodcock, ‘Councils Spent £3.5bn on Temporary Housing in Last Five Years’, BBC News, 17 November 2016, bbc.co.uk, accessed 11 May 2017. 53Alex Homer, ‘Town Halls Buy Back Right-to-Buy Homes’, BBC News, 3 May 2017, bbc.co.uk, accessed 11 May 2017. 54Haringey Council, ‘Haringey’s Development Partnership – A New Approach to Regeneration’, 11 November 2015, haringey.gov.uk, accessed 13 June 2017. 55Dave Hill, ‘Q&A: Haringey Leader Claire Kober on Borough’s “Development Vehicle” Plans’, 28 February 2017, onlondon.co.uk, accessed 13 June 2017. 56Aditya Chakrabortty, ‘Lives Torn Apart and Assets Lost: This is What a Labour Privatisation Would Mean’, Guardian, 19 January 2017, theguardian.com, accessed 13 June 2017. 57Shelter, ‘Can Haringey’s Housing Development Vehicle Provide a Case Study in Joint Ventures?’

These were the people who had bought their council homes under the Conservatives’ flagship Right to Buy legislation. They were, in a sense, the fifth column of Mrs Thatcher’s housing revolution – the former council tenants who opted, in huge numbers, to reject public ownership and embrace the property-owning democracy she so loudly proclaimed. The year that Thatcher became prime minister, 1979, represents a watershed in British social and political history in many respects, but nowhere more so than in the field of public housing. Determined to roll back ‘the frontiers of the state’, during the eleven years of her premiership she oversaw the sell-off of over forty state-owned businesses, employing 600,000 workers. But by far the largest single privatisation of public goods was the sale of council homes – worth an estimated £22 billion in 1997. Right to Buy – the purchase of council homes by sitting tenants – wasn’t a new policy.


pages: 525 words: 153,356

The People: The Rise and Fall of the Working Class, 1910-2010 by Selina Todd

call centre, collective bargaining, conceptual framework, credit crunch, deindustrialization, deskilling, different worldview, Downton Abbey, financial independence, full employment, income inequality, longitudinal study, manufacturing employment, Neil Kinnock, New Urbanism, Red Clydeside, rent control, Right to Buy, rising living standards, sexual politics, strikebreaker, The Spirit Level, unemployed young men, union organizing, upwardly mobile, urban renewal, Winter of Discontent, women in the workforce, young professional

The Act also took control for council rent levels out of the hands of local authorities by demanding that they set rents at market rates, meaning that much council accommodation was immediately made far more expensive that privately rented property. At the same time, council tenants were given the right to buy their home, although it was possible for local authorities to delay or veto the implementation of this right.6 In the 1960s the housing expert J.B. Cullingworth had warned policymakers that ‘the dissatisfaction at rising rents may eventually develop into something more significant.’7 In the 1970s his prophecy came true. Council tenants experienced 23 per cent rent rises between 1971 and 1974.8 Campaigns and rent strikes erupted, many of them instigated by married women living on council estates. Some of these women were already involved in organizing the amenities that their landlords had failed to provide. By the 1970s Betty Ennis of Coventry’s Willenhall estate was working full-time at the city’s GEC factory ‘but three nights a week I used to work in the youth club’, which the Residents’ Association ran for Willenhall’s increasing number of teenagers.

‘Why They Were Jailed’, Daily Mirror (15 January 1975), p. 5. 5. Tomlinson, Ricky, p. 154. 6. In fact they had only briefly been unable to buy their home. The Conservatives had enshrined the ‘right to buy’ in the 1936 Housing Act. This was revoked by Bevan’s 1948 Housing Act, but Harold Macmillan reinstated the right to buy just six years later. That said, this remained a theoretical right for most tenants until the 1970s. Prior to 1972, local authorities had great autonomy over whether or not to sell council houses. Heath’s government changed this by demanding that councils give a robust justification of why they could not sell off their council housing stock to tenants. They also provided an incentive, by allowing councils to use some of the profits to build new houses for their poorest residents. See Forrest and Murie, Selling the Welfare State, pp. 43–8. 7.

The Mahoneys were suffering no worse than the majority of their neighbours.14 To those living in such conditions, council housing offered almost unbelievable luxury. Council houses built before the mid-1950s tended to be of far higher quality than privately rented housing – or indeed many owner-occupied houses. Bevan’s Housing Act of 1948 stipulated generous provision for council houses, with spacious rooms and an indoor bathroom. In 1957 Donnison’s national survey found that most would-be home-movers ‘are likely to prefer the larger newer, and better-equipped dwellings available to the Council tenant’, rather than taking their chances in the private sector.15 By 1964, 80 per cent of households renting from a local authority enjoyed sole use of a sink, a fixed bath, a washbasin, a hot water supply and a toilet. Only 61 per cent of owner-occupiers had these amenities and only 57 per cent of private tenants.16 Commercial builders and landlords, who were primarily concerned to make a profit, lacked any incentive to modernize their accommodation at a time when many people were desperate for any kind of home.


pages: 317 words: 101,475

Chavs: The Demonization of the Working Class by Owen Jones

Asperger Syndrome, banking crisis, Berlin Wall, Boris Johnson, British Empire, call centre, collapse of Lehman Brothers, credit crunch, deindustrialization, Etonian, facts on the ground, falling living standards, first-past-the-post, ghettoisation, Gini coefficient, hiring and firing, housing crisis, illegal immigration, income inequality, informal economy, low skilled workers, low-wage service sector, mass immigration, Neil Kinnock, Occupy movement, pension reform, place-making, plutocrats, Plutocrats, race to the bottom, Right to Buy, rising living standards, The Bell Curve by Richard Herrnstein and Charles Murray, The Spirit Level, too big to fail, unpaid internship, upwardly mobile, We are the 99%, wealth creators, Winter of Discontent, women in the workforce, working-age population

We've only just very recently moved to a situation where we're building more social homes per year than we're losing under the right-to-buy.' Rising demand for housing pushed prices up, encouraging disastrous house-price bubbles. Housing became increasingly unaffordable for huge swathes of the population. Millions of people were condemned to languish for years on council housing waiting lists. Little wonder that the number of homeless Britons soared by 38 per cent between 1984 and 1989 alone. The policy also drove a wedge through working-class Britain, creating a divide between homeowners and council tenants. Right-to-buy meant that the best housing stock was sold off; and it was the relatively better-off council tenants who were becoming homeowners. Those who remained council tenants tended to be poorer and in the worst homes. By 1986, nearly two-thirds of tenants were from the bottom 30 per cent in terms of income, and only 18 per cent were from the richest half.

Caroline Flint's proposals could never have been implemented, because they were illegal under existing laws: councils were not permitted to make people homeless. But she had fuelled the now widespread political sentiments that council tenants were freeloaders. Flint expressed surprise at how social mixing in council housing had declined and levels of unemployment had shot up on estates over the last thirty years. Unless she was grossly incompetent at her job, she would have known that this was the legacy of right-to-buy. The least disadvantaged tenants had bought their homes, while the Tories-followed by New Labour-had refused to build any more. That meant that the remaining, ever-diminishing most in need. According to the late Alan Walter, a lifelong council tenant and former chairman of Defend Council Housing, this demonization also has political purposes. 'They promote this idea that anyone who wants to get on aspires to be a homeowner, and only those who can't do any better will live in council housing.'

As the 1970s drew to a close, before the Thatcher government launched the 'rightto-buy' scheme, more than rwo in five of us lived in council housing. Today the figure is nearer one in ten, with tenants of housing associations and co-operatives representing half as many again." Councils were prevented from building new homes and, over the last eleven years, the party of Bevan has refused toinvest money in the remaining houses under local authority control. As council housing collapsed, remaining stock was prioritized for those most in need. 'New tenants coming in, almost exclusively in order to meet stringent criteria, will either be single parents with dependent children, [or] people out of institutions including prisons,' explained the late Alan Walter, a lifelong council tenant and chairman of the pressure group Defend Council Housing. 'And therefore they are, almost by definition, those without work.'


pages: 232 words: 77,956

Private Island: Why Britain Now Belongs to Someone Else by James Meek

Affordable Care Act / Obamacare, Berlin Wall, business continuity plan, call centre, clean water, Deng Xiaoping, Etonian, HESCO bastion, housing crisis, illegal immigration, Martin Wolf, medical bankruptcy, Mikhail Gorbachev, post-industrial society, pre–internet, price mechanism, Right to Buy, risk tolerance, road to serfdom, Ronald Reagan, Rubik’s Cube, Skype, sovereign wealth fund, Washington Consensus, working poor

The number of new homes being built is barely above a hundred thousand. To understand how it came to this, you have to go back to 1979, when Margaret Thatcher began forcing local authorities to sell council houses to any sitting tenant able and eager to buy, at discounts of up to 50 per cent. It was one of those rare policies that still seems to contain in its very name the entire explanation of what it means: ‘Right to Buy’. Cherished by Tories and New Labour alike as an electoral masterstroke, it offered a life-changing fortune to a relatively small group of people, a group that, not by coincidence, contained a large number of swing voters. Right to Buy differed from the period’s other privatisations in many ways. It was tightly linked to the buyer’s personal use of the asset being privatised. If the Royal Mail had been sold on the same principle buyers would have got a discount on the share price based on the number of letters they’d posted over their lifetime.

Whether councils, given the chance, could have carried out the vast renovation programme that the housing associations are successfully pursuing (few who have lived in British cities for a generation, even if they don’t live on a council estate, can fail to have noticed how much less grotty the estates look) is a question that can’t be answered. The successful renovation of 70,000 council houses carried out in Birmingham after its council tenants voted against stock transfer in 2002 suggests that they could. But housing associations are dominant now in the place council housing used to be, and as the effects of Right to Buy, increasing population and the failure of the market to build enough houses to cope with it have become apparent, successive governments have turned to housing associations to fill the gap. In 2005, the housing association wave came to the Cranbrook Estate. Rather than try to transfer its stock in one go, Tower Hamlets has done it estate by estate. Its preferred bidder for Cranbrook was Swan Housing Association, created in the 1990s to own and run a set of former new-town homes in Basildon, Essex.

‘I think there should be a fairer way of asking people to leave their accommodation,’ she said. Council tenants face a jail sentence if they try to sublet. I asked Quinn if a relative could move in so as to avoid the bedroom tax. ‘That defeats the purpose of having a second bedroom,’ she said. ‘Why shouldn’t I have a home I don’t have to share with anyone? I could have my granddaughter move in. But if I had her, my daughter would have to give up the family credit. There’s a way round it but somebody else has to lose money.’ One of the curious things about Quinn’s situation is that the government would love to give her £100,000, but she’s not prosperous enough to qualify for it. That figure is the maximum discount on the market price a council tenant who exercises Right to Buy can now claim in London. Given that her flat would be worth at least £300,000, Quinn could, in theory, buy it, sell it on and pocket the difference.


pages: 301 words: 77,626

Home: Why Public Housing Is the Answer by Eoin Ó Broin

Airbnb, carbon footprint, Celtic Tiger, financial deregulation, housing crisis, Kickstarter, land reform, mortgage debt, negative equity, open economy, passive investing, quantitative easing, Right to Buy, Ronald Reagan, the built environment

Government also needs to urgently review the way in which Local Authorities are funded through current expenditure to carry out their ongoing management and maintenance functions. Norris and Hayden in their important 2018 study The Future of Council Housing highlight the inefficiencies and perverse incentives in the current funding regime.27 As differential rents do not cover the full cost of response and cyclical maintenance, there is a tendency for properties to be poorly maintained over the medium to long term, ultimately requiring expensive refurbishment or regeneration programmes. While the authors of the report suggest replacing the differential rent system with a form of HAP payments for Council tenants, a better mechanism would be to fund the ongoing maintenance of Local Authority properties in the same way as Government funds Approved Housing Bodies, i.e. with a monthly availability agreement payment that covers the shortfall between the differential rent level and the full economic cost of the management and maintenance of the units, including provision of a sinking fund for cyclical upgrades.

Again, the optimism was evident in the self-acknowledgement that ‘we have succeeded in achieving one of the highest levels of owner occupation in the world (80%)’ but recognised that ‘there remain households, especially younger people, who have an unrealised strong ambition to own their own homes’.29 To rectify this a new shared ownership scheme was to be introduced in the following years with the Council co-owning 50 percent of the home on which the owner would pay rent and ultimately buy out the State’s equity after twenty-five years. There was also a new £3,300 mortgage allowance for Council tenants who surrendered their tenancy in order to purchase a private house. Though similar to the discredited 1984 Surrender Grant the plan suggested that as it was not ‘a direct cash grant, the new allowance should not result in the large scale surrender’ and that it would be ‘monitored to ensure that it does not adversely affect the social stability of local authority estates’.30 There were also modest measures providing loans for house purchase and refurbishment and funds to allow Local Authorities to sell land for the building of affordable homes. The plan also contained explicit references to homelessness, Travellers and the private rented sector, areas of housing policy ignored in previous decades.

This is despite important evidence to the contrary from leading social housing policy experts, most notably in Tony Fahey’s Social Housing in Ireland published in 1997 and more recently by Byrne, Norris and Carnegie in 2018.19 The arguments underpinning the dogma of mixed tenure serve to misrepresent the vast majority of Local Authority estates, which are good places to live, with vibrant communities and sustainable economic bases. It is deeply patronising to working-class communities. Fahey rightly points out that Council tenants ‘would probably resent the implication that they required an infusion of middle-class households and middle-class values in order to bring their neighbourhoods up to satisfactory standards’.20 The findings of this landmark study on social housing rightly challenged the assumptions underlying A Plan for Social Housing, and indeed all subsequent Government housing policy documents, when it concluded that There is no justification for assuming that large-scale housing provision by local authorities (or by other social housing providers such as voluntary housing agencies) is misguided or doomed to widespread failure or should be drastically scaled back or abandoned by present or future housing policy.21 Indeed, the study, which was based on extensive field research on seven social housing estates across the State, including hundreds of interviews with Council tenants, strongly recommended to Government that ‘new social housing provision should be increased to the level required to meet present need’.22 The problem with the dogma of mixed tenure, as articulated in current housing policy discourse, is that it conflates high concentrations of poverty with mono-tenure.


pages: 578 words: 141,373

Concretopia: A Journey Around the Rebuilding of Postwar Britain by John Grindrod

Berlin Wall, garden city movement, housing crisis, Jane Jacobs, Kickstarter, megastructure, Neil Kinnock, New Urbanism, Right to Buy, side project, The Death and Life of Great American Cities, urban decay, urban planning, urban renewal, urban sprawl, women in the workforce, young professional

I think the trouble will be if they sell them all off and they get sold to buy-to-let people and it’s less well-off people living in them but still really transient, so you don’t have the benefit of it being council tenants where at least they’re permanent, at least they’ve got a stake.’ Had the gentrification already begun? ‘The thing is you can’t really tell that easily because there’s a whole lot of artists wandering around who almost by definition sort of are middle class. I know there’s at least one guy on this corridor who bought his flat because it was stylish rather than because it was cheap. So I guess he’s a gentrifier. And there’s a couple of others that are renting flats – I assume they’re renting them from people who used right-to-buy to buy them – but they’re trendier than your average. I’d be really interested keeping an eye on what happens here after they finish doing it all up in 2014.

In Coed Eva, the neighbourhood Jo and her husband Jim had lived on in the new town of Cwmbran near Cardiff, the social mix had been encouraged by the development corporation, who’d built houses for both council tenants and private buyers. ‘Below the school field it was development corporation,’ remembered Jo, ‘and above that it was private.’ ‘In the end you want your social mix,’ explained Jim. Before the development of Coed Eva in the late sixties, the new town had embodied a much more traditional postwar socialist model of building, with little or no private ownership. ‘There was an awful lot of public housing. It’s mixed now, but it wasn’t then. It was all housing for rent.’ But then among the thousands of council houses landed smaller estates of private housing: by 1978 over a fifth of all Cwmbran’s houses were privately owned. ‘They were worried then about creating a different sort of ghetto.

He gave permission for the scheme to go ahead, while at the same time listing hundreds of buildings in the area, which rendered the redevelopment impossible. Instead, the area was regenerated, as Edinburgh’s New Town had been. Soot and grime were scrubbed from buildings and cobbles, and the twee stalls of the re-opened market hall played host to street theatre performances while the ghosts of the long-gone market porters looked on. When the right-to-buy policy came along in the eighties those former council residents who’d fought to save the area sold up and moved on. Perhaps the most drastic piece of replanning that never came to pass in London was the inner ring roads. Abercrombie had proposed four arterial ring roads: radiating outwards from an inner ring feeding the centre of the city to a distant orbital road circling the outer suburban sprawl.


The New Enclosure: The Appropriation of Public Land in Neoliberal Britain by Brett Christophers

Boris Johnson, Capital in the Twenty-First Century by Thomas Piketty, Corn Laws, credit crunch, cross-subsidies, Diane Coyle, estate planning, ghettoisation, Hernando de Soto, housing crisis, income inequality, invisible hand, land reform, land tenure, land value tax, late capitalism, market clearing, Martin Wolf, New Journalism, New Urbanism, off grid, offshore financial centre, performance metric, Philip Mirowski, price mechanism, price stability, profit motive, Right to Buy, Skype, sovereign wealth fund, special economic zone, the built environment, The Wealth of Nations by Adam Smith, Thorstein Veblen, urban sprawl, wealth creators

Homer, ‘Town Halls Buy Back Right-to-Buy Homes’, BBC News, 3 May 2017. 1 ‘Greenwich Council Spend £46.5 Million Buying Homes Off the Open Market’, 27 November 2017, at fromthemurkydepths.co.uk. 2 H. Watt, ‘How the MoD’s Plan to Privatise Military Housing Ended in Disaster’, Guardian, 25 April 2017. 3 Ibid. 1 Council tenants receiving Housing Benefit are not prohibited from exercising their Right to Buy; indeed, a study carried out in 2016 found that 16 per cent of 4,538 Right to Buy sales by ten local authorities had been to tenants in receipt of this benefit. See P. Apps, ‘16% of RTB Purchasers “On Housing Benefit”’, Inside Housing, 21 June 2016. 2 Communities and Local Government Committee (10 February 2016, HC 370: para 11), ‘Housing Associations and the Right to Buy’. 3 Meek, Private Island,, p. 193. 4 P.

In 2012, for example, in the light of sluggish initial progress towards the target of releasing enough central government land for 100,000 new homes by 2015, Chancellor George Osborne threatened to take sites from departments without compensation.1 As far back as 1984, under powers provided by the 1980 Local Government Planning and Land Act, local authorities had been forced to sell sites after being given four months within which to do so voluntarily.2 The 2016 Housing and Planning Act not only revisited, revived and reinforced those particular powers of compulsion, but extended them to land held by all other public bodies, too.3 Furthermore, it introduced measures that may in due course require English local authorities to sell their most valuable, ‘higher value’ council homes when they become vacant. This was done to prepare the way for the government’s highly contentious plan to extend Right to Buy to housing association tenants (who generally do not enjoy this right on the same terms as council tenants) – the plan being to use some of the council proceeds to compensate housing associations for selling housing assets at a discount.4 Considerable scope for compulsion, as we shall shortly see, is also written into one of the key pillars of the second approach used by Whitehall to circumvent the problem of reluctant sellers – namely, to relocate away from the land’s owner effective control over both the decision-making related to disposal and the process of its enactment.

For one thing, certain public-sector bodies have been stripped of various powers and responsibilities that were formerly within their purview, and which by their nature are land-use-intensive. The most prominent and important example is of course local authorities’ responsibilities in relation to housing.1 Until the early 1980s, Britain’s local authorities were empowered and expected to build and manage council housing, and they did so on a vast scale (see Chapter 2). But that all changed when Thatcher came to power. Because housing was no longer considered part of the local state’s remit, council housing and the land it occupied became, in principle, ‘surplus’, and thus eligible for disposal under the famous Right to Buy program. This was not an instance of the state relinquishing property through efficiency gains, but through being throttled – by itself (a dynamic that Jamie Peck has memorably described in another context as ‘self-discipline descending into auto-evisceration or incapacitation’).1 And as Sir Michael Lyons observed in his influential 2014 Housing Review, it was not just the Thatcher administration that did the throttling.


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Ground Control: Fear and Happiness in the Twenty First Century City by Anna Minton

Albert Einstein, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Broken windows theory, call centre, crack epidemic, credit crunch, deindustrialization, East Village, energy security, Francis Fukuyama: the end of history, ghettoisation, hiring and firing, housing crisis, illegal immigration, invisible hand, Jane Jacobs, Jaron Lanier, Kickstarter, moral panic, new economy, New Urbanism, race to the bottom, rent control, Richard Florida, Right to Buy, Silicon Valley, Steven Pinker, the built environment, The Death and Life of Great American Cities, The Spirit Level, trickle-down economics, University of East Anglia, urban decay, urban renewal, white flight, white picket fence, World Values Survey, young professional

The United Nations Convention on Human Rights 1948 enshrines the right to adequate housing. 19. ‘Council tenants will have “right to buy”’, BBC, On This Day, 20/12/79 20. Holmans, A., Monk, S. & Whitehead, C., Homes for the Future, Cambridge Centre for Housing and Planning Research, University of Cambridge, Shelter, 2008 21. Ibid. 22. Housing Completions in Great Britain, Communities & Local Government Housing Research & Statistics, dated 30/5/08. In 1997 15.5 per cent of total completions were in the social sector, compared to 12.5 per cent in 2007. 23. House of Commons Select Committee on Public Administration, Minutes of Evidence, ‘Supplementary Memorandum by Defend Council Housing’ (CVP 05 (a)), Point 2: Holding ballots early to wrong foot opponents, and Point 3: Obstruction and intimidation, 2004 24. Duckworth, Lorna, ‘Council Tenants Vote Against Housing Transfer Plans’, Independent, 9/4/02 25.

But the amount of social housing built has plummeted, and is even less than when New Labour came to power, averaging 11 per cent of all new homes since 2002, compared to 46 per cent in 1980 and 15 per cent in 1989, when Thatcherism was at its height.22 Right to buy killed off councils’ ability to build more public housing and from this point on, first under the Conservatives and then more aggressively under successive Labour governments, the market began to enter every aspect of housing policy, each policy change bringing with it its own impenetrable jargon. First off was the introduction in 1986 of ‘stock transfer’, which oversaw the ‘transfer’ of millions of council homes from local authorities to voluntary-sector housing associations, also known as ‘Registered Social Landlords’, or RSLs. This is when council housing underwent its first major linguistic change and confusingly started to be called ‘social housing’. Ironically, given the increasingly market-orientated nature of today’s Registered Social Landlords, this part of the voluntary sector was once described as the ‘housing association movement’ and was characterized by its radicalism and progressive nature.

But the point is that private house builders have never met all Britain’s housing needs and they never will, because legislation states that housing must be provided for those in genuine need18 regardless of the ability to pay for it. From the end of the First World War until Mrs Thatcher came to power, public housing, which was once simply called council housing, provided housing for a wide range of people, more than a third of whom were on above-average incomes. That’s in sharp contrast to today where, like the public housing ‘projects’ of the US, public housing is seen as housing of last resort, places where two thirds of tenants are unemployed and on benefit. When the Conservatives came to power, they not only stopped building, they also famously introduced new legislation giving council-house tenants the ‘right to buy’ their homes, with the help of discounts on the market value of the property of up to 50 per cent. The BBC reported at the time: ‘The government believes the bill will transform the social structure of Britain for good.’


pages: 286 words: 95,372

The Fields Beneath: The History of One London Village by Gillian Tindall

ghettoisation, Jane Jacobs, means of production, New Urbanism, profit motive, Right to Buy, The Death and Life of Great American Cities, Thomas Davenport, urban sprawl

Excepting, of course, places such Kelly Street and the Crimea enclave: these, once narrowly saved from demolition, are now carefully conserved, worlds away in character though not in distance from the ill-designed housing blocks and litter of Malden Road. East Kentish Town has, by good luck, avoided such obvious ghettoisation. Here a whole grid-pattern of streets was initially bought by the local authority for demolition, but a belated change of heart meant the terrace houses were then rehabilitated as flats and maisonettes for Council tenants (see pages 231–2). These proved very popular, with the inevitable result that since the right-to-buy legislation of 1980, many of the properties have passed out of the Council’s stock of homes and into private ownership. They have often been sold on subsequently (something that the advocates of Council house sales apparently failed to envisage) and so the social mix is changing again, with the arrival in these streets of prosperous middle class youngsters starting out in life, or of older single people with some equity.

But another important divisive factor is the constraints placed upon council tenants, the petty regulations about door-painting and petkeeping, the general lack of real privacy despite the much vaunted ‘selfcontainment’. Few people would be council tenants, at least not in a flat, if they had any financially feasible alternative, and it is significant that vandalism is far worse on estates than it is in the more mixed social communities of the streets. If you live in a house in a street then you are of the community of that street and, by extension, the whole area, whether you occupy a whole house or a self-contained basement flat or two rooms and a shared bath on the landing. If you live on a Council estate, however, you live ‘in Lenham’ or ‘in Baxton’ and you are instantly labelled. Some of these drawbacks in the council housing system are, of course, the product of several factors beyond the control of individual councils.

It is a moot point whether, had public authorities not attempted to control the situation so heavily since 1945, but had allowed the traditional laissez faire system of private landlordism to continue, the result today would on balance be better or worse. It would certainly be different. One change of council policy in the last few years in Camden is, however, doing much to bridge the widening gulf between council tenant and owner-occupier. Many of the houses originally acquired in the early 1960s with a view to demolition are now being done up and re-let to council tenants, which pleases both the prospective tenants and the middle-class conservationists. It may be that time will expose certain follies in this policy too, and certainly it has its critics (‘Throwing good money after old bricks’). But for the time being it seems a good idea – and, what is more important, a modest, piecemeal, flexible idea which does not involve taking long-term expensive decisions that cannot easily be revoked.


pages: 230 words: 79,229

Respectable: The Experience of Class by Lynsey Hanley

Berlin Wall, cuban missile crisis, David Brooks, delayed gratification, Etonian, full employment, housing crisis, illegal immigration, invisible hand, liberation theology, low skilled workers, mutually assured destruction, Neil Kinnock, Norman Mailer, Own Your Own Home, Right to Buy, Ronald Reagan, strikebreaker, upwardly mobile, Winter of Discontent

First, through the dismantling of trades union power, which had helped to integrate the jobless into the wider working population by establishing and then protecting rights and benefits when they were out of work. Second, through negative propaganda, in tacit collusion between government and newspaper owners, which sought to isolate the badly off and the bolshy from an upwardly mobile, consumerist working class. Third, through populist policy-making: the Right to Buy, which divided local authority tenants into the ‘aspirational’ and the ‘non-aspirational’ depending on whether or not they bought their council house, being a prime example. The idea that working-class respectability no longer exists appeals to people who believe that the social and political changes of the last thirty-five years have sorted the wheat from the chaff. From this viewpoint, anyone who proved they could string a sentence together and brush their own hair has – rightfully, it’s believed – gained admittance to the swollen middle class, leaving behind a disreputable and undeserving lumpenproletariat to wallow in their own shite.

The outer wards of Nottingham, containing estates built to house workers at local pits and textile factories, are among those in the country sending the fewest young people to university. Most estates are no longer half-empty but still suffer from geographical isolation and, increasingly, the effects of Right to Buy combined with those of Buy to Let, where former council homes are bought by private landlords who are unconcerned with maintenance or neighbourhood stability. Most council tenants may be in work, but receive such low wages that they cannot survive without housing benefit. The geographer Danny Dorling notes that across England as a whole there are plenty of houses with many spare bedrooms, but because they tend to be owned privately and inhabited by the well-off, the government doesn’t consider them ‘spare’ in the way that they feel free to regard bedrooms in the social sector as ‘spare’ and therefore liable to be sanctioned.5 In London, against an opposing trend elsewhere in the country for once-grand family homes to become nurseries and care homes, mini-mansions which were converted into flats mid-century are being turned back into single family homes, with multiple en-suites, live-in nanny quarters and two-storey basements to house the gym, wine cellar and cinema.

The majority culture in Britain favours owning your own home, even though it has become less, not more common to do so. Many who favour renting, because of the flexibility it offers, eventually make the decision to buy a home if they can afford it simply because private renting in Britain is expensive, inconvenient and legally biased towards landlords as opposed to tenants. Some council tenants who believe that, in an ideal world, the Right to Buy should not exist have nevertheless bought their homes because they recognize the stability and the possibility of economic advancement it brings. In my experience, ‘getting on’ has meant a constant assessment of what is important and what isn’t, in order to avoid having to swallow a lot of bullshit related to notions of consumption and distinction. What’s regarded as such depends on the individual, though to me it has always meant trying to work out what is necessary to a comfortable lifestyle – now that I can afford one – and what is simply ‘the done thing’ to own.


pages: 352 words: 107,280

Good Times, Bad Times: The Welfare Myth of Them and Us by John Hills

Capital in the Twenty-First Century by Thomas Piketty, credit crunch, Donald Trump, falling living standards, full employment, Gini coefficient, income inequality, income per capita, longitudinal study, mortgage debt, pension reform, plutocrats, Plutocrats, precariat, quantitative easing, Right to Buy, unpaid internship, very high income, We are the 99%, working-age population, World Values Survey

So, if either Jim or Tracy did end up needing residential care later in life, they could find that a lifetime of saving would have done them little or no good. As this chapter discusses, however, these rules had been set to change from 2016, but this has now been delayed to 2020. But it could have been different for them. With a bit more capital or ability to borrow at the right moment, they might have been able to buy their council house at a very substantial discount. A 50 per cent Right to Buy discount in the 1990s on a property now worth, say, £120,000 would effectively have represented being given equity of £60,000 today. And capital tied up in housing would not affect means-tested benefits or assistance with care (if the other partner is still at home). The state would have greatly added to any capital they could have put together back then. At their levels of pay, and working in the private sector, the chances were that Jim and Tracy would not have been in private pension schemes.

A ‘Savings Gateway’ scheme was, after successful piloting, going to be rolled out nationally in July 2010 to offer a government ‘match’ of 50 pence for every £1 saved by low-income households, but this too was abolished as an early austerity measure after the 2010 General Election. In a surprise move in the 2016 Budget, though, the new Conservative government said that a new ‘Help to Save’ scheme with a very similar structure would be introduced by 2018. Rather than these short-lived schemes, however, by far the most important example of public policy boosting wealth, beyond the tax advantages described above, is the Right to Buy council (or former council) housing at a discount. These accumulated discounts now represent perhaps £150–200 billion, or about 3–4 per cent of all non-pension wealth.66 In the other direction, recent and future students face escalating debt from student loans, albeit debt of a particular kind that they only have to repay when earnings are above a certain level, and which many will never repay in full. At the level of university fees since 2012, many future graduates will now have student debt approaching £40,000.

Most of this wealth accumulation had been helped (or at least not hindered) by the tax system, with favourable treatment for their pensions saving, house purchase, tax-free savings accounts, and capital gains. By contrast, the £6,000 of cash savings that Jim and Tracy had managed to accumulate had not been so favourably treated by the tax system, and if this sum had been a little higher, they would have been penalised at times when they claimed benefits. There is some luck in this – if they had been in a position to exercise the Right to Buy their council house in the 1990s, they would have been considerably helped by the system. The sums involved when one looks at wealth are far greater than those we normally think about in terms of annual incomes. However, the way policy relates to it is also far less coherent, treating what are inherently similar things (ways of saving or kinds of asset) in very different ways, and often benefiting the already advantaged most and reinforcing inequalities.


pages: 613 words: 151,140

No Such Thing as Society by Andy McSmith

anti-communist, Ayatollah Khomeini, Berlin Wall, Big bang: deregulation of the City of London, Bob Geldof, Boris Johnson, British Empire, Brixton riot, call centre, cuban missile crisis, Etonian, F. W. de Klerk, Farzad Bazoft, feminist movement, fixed income, Francis Fukuyama: the end of history, friendly fire, full employment, glass ceiling, God and Mammon, greed is good, illegal immigration, index card, John Bercow, Kickstarter, liberal capitalism, light touch regulation, Live Aid, loadsamoney, long peace, means of production, Mikhail Gorbachev, mortgage debt, mutually assured destruction, negative equity, Neil Kinnock, Nelson Mandela, North Sea oil, Northern Rock, old-boy network, popular capitalism, Right to Buy, Ronald Reagan, Rubik’s Cube, Sloane Ranger, South Sea Bubble, spread of share-ownership, strikebreaker, The Chicago School, union organizing, upwardly mobile, urban decay, Winter of Discontent, young professional

In Conservative-run Westminster, the council leader Lady Porter, who was one of Britain’s richest women (as the daughter of the founder of Tesco), was illicitly arranging for council tenants to be shipped out of marginal wards to be replaced by owner-occupiers, who were assumed to be more likely to vote Conservative. Some of the council tenants were decanted into a tower block infested with asbestos. When the scandal came to light in 1991, Lady Porter and others were ordered to pay surcharges originally set at £21m. The government’s first assault on the authority of local councillors was the legislation compelling them to sell council houses to any tenant who wished to buy. For years, there had been tension between council tenants who aspired to be property owners, and councillors – not necessarily Labour councillors – who argued that their duty to house the homeless required them not to deplete their stock of council housing. The Thatcher government cut through this argument by forcing councils to sell, at discounts of up to 60 per cent, and banning them from using the proceeds to build new council properties.

The Thatcher government cut through this argument by forcing councils to sell, at discounts of up to 60 per cent, and banning them from using the proceeds to build new council properties. They had to use it to repay debt. Norwich Council already ran a scheme that gave tenants the right to buy newly built homes, which preserved the stock of council houses, but the council’s attempt to fight the legislation in the high court brought them up against the wholly unsympathetic Lord Denning, Master of the Rolls. A million and a quarter former tenants took this cheap route to homeownership, raising £18 billion for public funds and turning hundreds of thousands of Labour voters into Conservatives, while for the first time in post-war memory, homeless beggars became a fixture on city streets. Another government tactic, condemned in the Church of England report, was to reduce progressively the amounts that councils received in government grants.

Spending on the NHS and on personal social services was to go up by at least 3 per cent a year above inflation. Child benefit and pensions would also be substantially increased. Unnecessary car journeys were to be discouraged by abolishing the tax disc and making up the lost tax through higher petrol duty. The number of prisoners was to be reduced through lower sentences for non-violent offences. There was to be a huge programme of council-house building and repairs. Local authorities were to be given more powers than ever before, including in some cases the power to convert private schools into state schools. The charitable status enjoyed by Eton and other public schools was to be abolished, along with everything that the upper classes seemed to enjoy most, including corporal punishment (then still practised in schools), the House of Lords and fox-hunting.


pages: 169 words: 52,744

Big Capital: Who Is London For? by Anna Minton

Airbnb, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Capital in the Twenty-First Century by Thomas Piketty, collateralized debt obligation, Credit Default Swap, credit default swaps / collateralized debt obligations, Donald Trump, eurozone crisis, Fall of the Berlin Wall, Frank Gehry, high net worth, housing crisis, illegal immigration, Kickstarter, land value tax, market design, new economy, New Urbanism, offshore financial centre, payday loans, quantitative easing, rent control, Right to Buy, sovereign wealth fund, the built environment, The Wealth of Nations by Adam Smith, urban renewal, working poor

When I was a child in London in the 1970s, and even into the 1980s, council housing did provide homes for a wide range of people, more than a third of whom were on above-average incomes. I didn’t live in council housing but some of my friends did – which is not surprising given that in 1981 a third of all Londoners lived in council housing. And their houses weren’t so different from mine. I ‘played out’ and rollerskated around estates, which were hardly alien places. They were no socialist utopia either, but life for many people on council estates was OK and certainly much better than the fight for survival that it is today, with many tenants at the sharp end of austerity policies and fighting campaigns to save their estates from demolition. During the 1980s, council estates began to change. The impact of Margaret Thatcher’s flagship Right to Buy policy that saw the sell-off of millions of council homes at very large discounts, which began in the 1980s and continues to this day, is well known and cannot be underestimated.

Public housing accounted for a huge proportion of British housing throughout the twentieth century. Since the 1980s, it has been steadily removed from the system, through the combination of Right to Buy, which saw the sell-off of 2 million council homes, and Buy to Let, which has resulted in 40 per cent of those former council homes now being owned by private landlords who rent them out for three and four times the money. During the 1980s a decision was taken to cease building housing for those on lower incomes and to create instead a system whereby housing benefit ‘would take the strain’. The combination of the decision to stop building council housing and Right to Buy shifted social tenants into private rented housing. It is one of the reasons why we have such a shortage of affordable homes. But since changes to housing benefit were introduced in the late 2000s, the situation has become far more acute for people on low incomes.

‘The scale of council-owned land is vast and greatly under-appreciated,’ he told the Financial Times. ‘There are particularly large concentrations of council-owned land in inner London and this is some of the highest-priced land in the world … [The] local authority planning regime has got to adapt properly to the potential for [market-priced rent] developments.’24 A key point Adonis makes is that although people have bought their own homes that does not affect the council’s right to demolish. ‘It is important to understand that local authority development rights are unaffected by thirty years of “Right to Buy”, which has transferred leaseholds but not freeholds. They do not therefore undermine the power of local authorities – or housing associations … – to redevelop estates,’ the report states. In London 50 per cent of all property is leasehold, so according to this logic half of all homeowners in London could at one fell swoop have their property rights removed – although fortunately for the majority of them, their landlord is not a local authority or housing association.


pages: 409 words: 118,448

An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy by Marc Levinson

affirmative action, airline deregulation, banking crisis, Big bang: deregulation of the City of London, Boycotts of Israel, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, car-free, Carmen Reinhart, central bank independence, centre right, clean water, deindustrialization, endogenous growth, falling living standards, financial deregulation, floating exchange rates, full employment, George Gilder, Gini coefficient, global supply chain, income inequality, income per capita, indoor plumbing, informal economy, intermodal, invisible hand, Kenneth Rogoff, knowledge economy, late capitalism, linear programming, manufacturing employment, new economy, Nixon shock, North Sea oil, oil shock, Paul Samuelson, pension reform, price stability, purchasing power parity, refrigerator car, Right to Buy, rising living standards, Robert Gordon, rolodex, Ronald Coase, Ronald Reagan, Simon Kuznets, statistical model, strikebreaker, structural adjustment programs, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, unorthodox policies, upwardly mobile, War on Poverty, Washington Consensus, Winter of Discontent, Wolfgang Streeck, women in the workforce, working-age population, yield curve, Yom Kippur War, zero-sum game

The place to start was not by attacking the trade unions or by selling off British Steel, but by letting people own their homes. In 1979, her government introduced a bill granting tenants in housing owned by local authorities, known as “council housing,” the right to buy their units at prices far below market value. This was privatization for the masses: three in ten British households lived in publicly owned housing. Those who had been council tenants for over twenty years could buy their house or apartment at a 50 percent discount; if they were uncertain, they could pay a hundred-pound deposit and preserve their right to buy at a fixed price for two years. The local authority that was selling the property was obliged to offer a mortgage.18 Right to Buy, as it was known, targeted a core Labour constituency. Most of the council estates had been built under Labour governments, and their residents were reliable Labour voters.

Most of the council estates had been built under Labour governments, and their residents were reliable Labour voters. By the spring of 1983, two-and-a-half years after Parliament enacted Right to Buy into law, 274,650 council tenants in England alone had acquired their homes. A poll showed that 59 percent of people who had voted for Labour in 1979 and subsequently bought their own homes would not vote for Labour again. Right to Buy was privatization conducted at a level that made sense to average people. As it went forward, gathering public support, the political obstacles to privatizing state-owned companies fell away.19 Privatization of state-owned enterprises was not a new idea in 1979. The Conservative government led by Winston Churchill had sold British Steel into private ownership in the early 1950s, and the government of German chancellor Konrad Adenauer had sold a majority of the shares of Volkswagen through a public offering in 1961.

Labor productivity rose much more slowly during her eleven years in office than it had during the previous decade. Several years of strong growth in the second half of the 1980s followed several years of poor economic performance, but the notion that the Conservative turn restored the British economy to rude health is simply not right.29 Some people in Great Britain fared well thanks to Thatcher’s policies. Over a million working-class families had the opportunity to become homeowners thanks to Right to Buy, although large numbers of them had to sell after discovering that homeownership required more than their incomes would permit. Those with capital prospered in the friendlier investment climate, and those seeking to start businesses found their paths eased by the state’s new interest in entrepreneurship. Coincidently, the eastern coast of Scotland and the isles to the north flourished thanks to the need for labor to drill for, produce, and transport North Sea oil.


pages: 279 words: 90,888

The Lost Decade: 2010–2020, and What Lies Ahead for Britain by Polly Toynbee, David Walker

banking crisis, battle of ideas, Boris Johnson, call centre, car-free, centre right, collective bargaining, congestion charging, corporate governance, crony capitalism, David Attenborough, Dominic Cummings, Donald Trump, Downton Abbey, energy transition, Etonian, first-past-the-post, G4S, gender pay gap, gig economy, Gini coefficient, global village, high net worth, housing crisis, income inequality, industrial robot, Intergovernmental Panel on Climate Change (IPCC), James Dyson, manufacturing employment, mass immigration, moral panic, mortgage debt, North Sea oil, offshore financial centre, payday loans, pension reform, quantitative easing, Right to Buy, Saturday Night Live, selection bias, smart meter, Uber for X, urban renewal, working-age population

It ordered public land to be released; the NAO found that little usable land was. To secure more genuinely affordable dwellings for rent would have meant abandoning the flagship Thatcher policy of selling off council homes at a high discount. Instead, right to buy was strengthened. In 2012 discounts were increased, and in 2016 powers were taken to force housing associations to sell cheaply to their tenants. Once council tenants bought their homes, many resold for a high profit; the new buyers filled them with students or transients at higher rents, upsetting previously stable communities of long-term residents. In London, 40 per cent of dwellings sold under right to buy had found their way back into the rental market, under private landlords this time, so councils were paying far higher rents to house homeless people. Leicester’s stock of 38,000 council dwellings had fallen to 21,000 through the enforced sales; now there were 6,000 people on the city’s waiting list for a council tenancy.

One set of ministers in the communities department enjoined councils to cut homelessness, while at the same time those in the Treasury and the DWP helped push it up. None of this laid a single brick, pointed out Simon Bowkett of the charity CoLab Exeter, ruefully. The stock of affordable dwellings was falling. Homes available for social renting dropped by 166,000 from 2012 to 2016, the Chartered Institute of Housing reported, as dwellings were sold under the right to buy and not replaced; a further 370,000 dwellings were predicted to go by 2020. Social renting from councils and non-profit housing groups had fallen from 30 per cent of tenures to 17 per cent. The government gave up on anything resembling coherent policy. Entire town centres were given over to students in places such as Durham, affecting locals, their children and the commercial ecology. Bristol mayor Marvin Rees deplored the exemption universities enjoyed from paying local business rates and the boom in council tax-exempt student flats that cut his income.

Leicester’s stock of 38,000 council dwellings had fallen to 21,000 through the enforced sales; now there were 6,000 people on the city’s waiting list for a council tenancy. The only homes the council could afford to build were for private sale. Sir Peter Soulsby, the city’s Labour leader, said, ‘At the very least right to buy ought to be suspended in cities like Leicester until we have dealt with the housing crisis.’ Councils showed enterprise by creating arm’s-length companies that were able to borrow outside the usual restrictions. Eventually, the meagre numbers – only 1,900 new council dwellings completed in 2015–16 – proved unacceptable even to ministers. Their next move wasn’t so much a U-turn as a grudging acceptance that councils were irreplaceable as builders; sotto voce, ministers told councils they could borrow more, and the pace of construction quickened.


pages: 443 words: 98,113

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay by Guy Standing

3D printing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Big bang: deregulation of the City of London, bilateral investment treaty, Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, cashless society, central bank independence, centre right, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, credit crunch, crony capitalism, crowdsourcing, debt deflation, declining real wages, deindustrialization, disruptive innovation, Doha Development Round, Donald Trump, Double Irish / Dutch Sandwich, ending welfare as we know it, eurozone crisis, falling living standards, financial deregulation, financial innovation, Firefox, first-past-the-post, future of work, gig economy, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, housing crisis, income inequality, information retrieval, intangible asset, invention of the steam engine, investor state dispute settlement, James Watt: steam engine, job automation, John Maynard Keynes: technological unemployment, labour market flexibility, light touch regulation, Long Term Capital Management, lump of labour, Lyft, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, means of production, mini-job, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Kinnock, non-tariff barriers, North Sea oil, Northern Rock, nudge unit, Occupy movement, offshore financial centre, oil shale / tar sands, open economy, openstreetmap, patent troll, payday loans, peer-to-peer lending, plutocrats, Plutocrats, Ponzi scheme, precariat, quantitative easing, remote working, rent control, rent-seeking, ride hailing / ride sharing, Right to Buy, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Altman, savings glut, Second Machine Age, secular stagnation, sharing economy, Silicon Valley, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, Stephen Hawking, Steve Ballmer, structural adjustment programs, TaskRabbit, The Chicago School, The Future of Employment, the payments system, The Rise and Fall of American Growth, Thomas Malthus, Thorstein Veblen, too big to fail, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, Y Combinator, zero-sum game, Zipcar

The UK’s present housing crisis has its origins in Thatcher’s decision in the 1980s to give council tenants the ‘right to buy’ their homes at a substantial discount, a subsidy scheme that decimated the stock of social housing. Nearly 2 million tenants have since taken advantage of the scheme. Financial liberalisation also meant mortgages became easier to obtain. Home ownership peaked in 2003, when 71 per cent of homes in England were owned outright or with a mortgage. Subsequently, while outright ownership went on growing, the share of mortgaged housing plummeted. Something similar happened in the rental sector. The share of social housing continued to decline, spurred by the coalition government’s decision to increase the ‘right-to-buy’ discount. The number of households renting from private landlords more than doubled between 2001 and 2015 to 5.4 million, a fifth of all households.

Yet the government’s response has been to pile on more subsidies that make the situation worse. It has stoked demand for homes to buy, raising prices further, while the supply of affordable properties is dwindling, worsened by extending the ‘right to buy’ to housing associations and forcing local councils to sell their most valuable properties. The subsidies help the better-off with the wherewithal to start on the housing ladder, magnifying inequality. The ‘help-to-buy’ scheme, introduced by the coalition and expanded in 2015, has been billed as the biggest home ownership programme since Thatcher introduced the ‘right to buy’ for council houses. The £22 billion scheme, which runs to 2020, comprises interest-free loans and a subsidised savings account (Help-to-Buy ISA) for a deposit to buy new-build homes up to £250,000 (£450,000 in London) and mortgage guarantees to buy homes up to £600,000.

The number of households renting from private landlords more than doubled between 2001 and 2015 to 5.4 million, a fifth of all households. By 2025, a quarter will be renting privately, according to predictions by PwC, the accountancy firm.31 For those aged twenty to thirty-nine, ‘Generation Rent’, a majority will be doing so. The number of landlords has also increased, from 1.5 million just before the financial crash to over 2 million. They own 5 million properties, including more than a third of all former council houses sold under the ‘right-to-buy’ programme. While 80 per cent of landlords own just one property, according to the Bank of England, the remaining 420,000 own on average eight properties. Some own hundreds. In a market of contrived scarcity, the shrinking supply of affordable properties for home-buyers and tenants has pushed up rental incomes and prospective capital gains. According to mortgage lender Kent Reliance, in 2014–15 landlords made £112 billion in rent and capital gains, an annual return of 12.5 per cent per property.


pages: 434 words: 150,773

When the Iron Lady Ruled Britain by Robert Chesshyre

Berlin Wall, Big bang: deregulation of the City of London, British Empire, corporate raider, deskilling, Etonian, Fall of the Berlin Wall, financial deregulation, full employment, housing crisis, manufacturing employment, mass immigration, means of production, Neil Kinnock, North Sea oil, oil rush, plutocrats, Plutocrats, Right to Buy, Ronald Reagan, school choice, Silicon Valley, the market place, trickle-down economics, union organizing, wealth creators, young professional

The estate was built in the mid-seventies, home to six thousand people, its flats linked by mile upon mile of asphalt walkway, and connected by bridges to other estates of equally formidable reputation. From one office, staff administer eleven thousand of the least desirable homes in the country. Seven years after Mrs Thatcher had boosted the ideal of a property-owning democracy by compelling local authorities to offer council houses for sale, not a single one of those eleven thousand tenants had bought the roof over his head. Between them the residents owed the borough five million pounds in rent arrears. Well over three-quarters of them fervently wanted to go elsewhere, a wish that will be fulfilled for only a tiny minority. On the ground floor many windows are permanently boarded, the occupants preferring life in a half-light to the near certainty of being burgled when they go out.

He was seeking to create a national mood music familiar to all who have lived under authoritarian governments. It was not what we have been accustomed to in Britain. Thatcher was already assaulting the last redoubts from which effective opposition could be deployed – education authorities and turbulent councils; now her acolytes were turning on the freedom to think differently. Although celebrated as the advocate of such liberties as the right to buy shares (and to drink in pubs all day), Thatcher was proving reluctant to tolerate the bedrock freedom – the right to oppose. She did manage to unite the media by her obsessive pursuit of the former MI5 man Peter Wright’s memoir Spycatcher. Two or three separate issues were cynically rolled into one in order to suppress both public knowledge and discussion of the power and accountability of the security services and of specific allegations, such as whether Roger Hollis, the former head of MI5, had been a spy and whether elements within MI5 had tried to destabilize Harold Wilson’s government.

Two small fires were started at other schools in the next two days. The local reporter told me that there was at least one arson in Skem each week. Skelmersdale is not a natural community with social and occupational gradations. Its inhabitants are totally removed from the experience of most of Britain. The professionals who service the town, with very few exceptions – some of those are ‘missionaries’ like clergymen – live elsewhere. Eighty per cent of council tenants – the vast majority of the town – receive some form of housing benefit. Some unmarried mothers are so socially incompetent that the idea of going to a community centre for a cup of tea – in the words of a social worker – ‘freaks them out, they can’t handle it’. Even the Scouser accent sets them apart. Unlike a Yorkshire or Lancashire accent, it is an entirely working-class accent. With rare exceptions, the minute a Scouser opens his mouth, fellow countrymen can accurately pin him down as a man likely to be without skills or higher education.


pages: 519 words: 136,708

Vertical: The City From Satellites to Bunkers by Stephen Graham

1960s counterculture, Berlin Wall, Boris Johnson, Buckminster Fuller, Buy land – they’re not making it any more, Chelsea Manning, Commodity Super-Cycle, creative destruction, deindustrialization, digital map, drone strike, Edward Glaeser, Edward Snowden, energy security, Frank Gehry, ghettoisation, Google Earth, Gunnar Myrdal, high net worth, housing crisis, Howard Zinn, illegal immigration, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, late capitalism, low earth orbit, mass immigration, means of production, megacity, megastructure, moral panic, mutually assured destruction, new economy, New Urbanism, nuclear winter, oil shale / tar sands, planetary scale, plutocrats, Plutocrats, post-industrial society, Project Plowshare, rent control, Richard Florida, Right to Buy, Ronald Reagan, Skype, South China Sea, the built environment, The Death and Life of Great American Cities, trickle-down economics, urban decay, urban planning, urban renewal, urban sprawl, white flight, WikiLeaks, William Langewiesche

‘Developers getting … land at a fraction of its true value, on the promise of future profits that mysteriously never arrive; a revolving door between local authorities and regeneration consultancy and PR firms.’79 The impact of speculation on central land values, and the huge profits to be made from replacing the neglected remnants of social and municipal housing with elite housing towers, radically undermines the chances that large-scale social housing will survive in London’s core. Instead, as in New York, the super-elite is taking to the skies. Sometimes, London’s better-quality modernist towers – such as Ernö Goldfinger’s Trellick Tower – have escaped the wrecking ball. Instead, exploiting Thatcher’s ‘right to buy’ for council tenants, their apartments are now privatised and sold at high prices to design-conscious elites (often professional architects).

Worse still, the only way London’s boroughs can now generate even tiny amounts of capital for ‘affordable’ housing – which still remains very expensive and out of reach of the genuinely poor – is through contributions from the developers of elite luxury towers in the form of ‘planning gain’.77 (Even this fig leaf now faces abolition from the Tory government.) London’s remaining estates of social and council housing – and the inherited legacies of modernist mass social housing such as the Heygate Estate in Southwark on the South Bank – meanwhile, are being ‘regenerated’ in ways that displace residents, re-engineer the areas as upper-middle-class or elite housing, and offer token units of affordable housing by way of camouflage. In such cases, the crumbling legacies of visions of mass social housing organised vertically with high levels of space, services and greenery are erased, to be directly replaced by new elite towers.


pages: 1,213 words: 376,284

Empire of Things: How We Became a World of Consumers, From the Fifteenth Century to the Twenty-First by Frank Trentmann

Airbnb, Anton Chekhov, Ayatollah Khomeini, Berlin Wall, Big bang: deregulation of the City of London, British Empire, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon footprint, Cass Sunstein, choice architecture, clean water, collaborative consumption, collective bargaining, colonial exploitation, colonial rule, Community Supported Agriculture, cross-subsidies, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, equity premium, Fall of the Berlin Wall, Fellow of the Royal Society, financial exclusion, fixed income, food miles, full employment, germ theory of disease, global village, haute cuisine, high net worth, income inequality, index card, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, James Watt: steam engine, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kitchen Debate, knowledge economy, labour mobility, libertarian paternalism, Livingstone, I presume, longitudinal study, mass immigration, McMansion, mega-rich, moral panic, mortgage debt, Murano, Venice glass, Naomi Klein, New Urbanism, post-industrial society, post-materialism, postnationalism / post nation state, profit motive, purchasing power parity, Ralph Nader, rent control, Richard Thaler, Right to Buy, Ronald Reagan, school vouchers, Scientific racism, Scramble for Africa, sharing economy, Silicon Valley, Skype, stakhanovite, the built environment, the market place, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, trade liberalization, trade route, transatlantic slave trade, union organizing, upwardly mobile, urban planning, urban sprawl, Washington Consensus, women in the workforce, working poor, young professional, zero-sum game

An official report for the Ministry of Housing recognized the need for greater accountability as well as choice. Tenants expected fair treatment and to have the right to complain.99 It left the thorny issue of redress unanswered. After all, council tenants, unlike private ones, did not have the option to move house if they were dissatisfied. For Conservatives, this distinction remained axiomatic. ‘In a free country,’ the 1963 Conservative housing policy stressed, ‘the householder must be prepared to meet the cost of his house where he is able to do so. Otherwise he will have little freedom of choice.’100 This was unlikely to appease council tenants asked to pay rising rents while waiting for repairs. As the decade progressed, some took councils to court. Others joined protest marches and tenant associations. Poor people might be dependent on the state.

‘We are in the midst of a silent war,’ Dichter wrote in 1960: ‘on the outside with Russia, and on the inside with our old concepts of thinking.’ Not only would the economy ‘literally collapse overnight’ if critics had it their way and consumption was scaled back to ‘immediate and necessary needs’. It would weaken the American psyche. ‘The real defenders of a positive outlook on life, the real salesmen of prosperity, and therefore of democracy, are the individuals who defend the right to buy a new car, a new home, a new radio.’137 Feminists pointed out how MR recycled gender inequality by glorifying housework.138 Dichter, however, was no simple defender of the social order. Like Crosland, he believed that the spread of affluence would slow down competitive status-seeking. Instead of ‘keeping up with the Joneses’, individuals would spend more energy developing their ‘inner Joneses’, retire earlier, bake their own bread and design their own distinct outfits and home interiors.

Poor people might be dependent on the state. Nonetheless, one association said, they should have the ‘indisputable right’ to take decisions that concerned their everyday lives, their homes and their community.101 In her dual plan in 1979 for a ‘right to buy’ and a Tenants’ Charter for those who chose not to, Thatcher capitalized on that earlier wave of anger. She did not create it.102 The movement for patient rights was the second major arena in which users were asserting greater voice vis-à-vis professional experts and authorities. Although healthcare was provided by a mix of public, private and charitable bodies, the issues of choice and voice were similar to those in the public sector. By the early 1970s, the ‘health consumer’ had entered the political lexicon. As with tenants, patients’ metamorphosis into consumers did not begin with neo-classical economics but with a critique of authority and a revival of voluntarism.


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The Nanny State Made Me: A Story of Britain and How to Save It by Stuart Maconie

banking crisis, basic income, Bernie Sanders, bitcoin, Boris Johnson, British Empire, cognitive dissonance, collective bargaining, Corn Laws, David Attenborough, Desert Island Discs, don't be evil, Downton Abbey, Elon Musk, Etonian, failed state, Francis Fukuyama: the end of history, full employment, G4S, Gordon Gekko, greed is good, helicopter parent, hiring and firing, housing crisis, job automation, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, North Sea oil, Own Your Own Home, plutocrats, Plutocrats, rent control, Right to Buy, road to serfdom, Silicon Valley, The Chicago School, universal basic income, Winter of Discontent

The government subsidises these landlords and the banks make it easier to get buy-for-rent mortgages. OK, both the Labour and Tory 2017 election manifestos promised that large numbers of council housing must and would be built. But they still said the priority is to build affordable housing to buy. They both think they have to keep alive that distant dream for people.’ In Scotland, until the Right to Buy was forced on them, over 70 per cent of people lived in council housing. More than half of Wales did. But in spite of the best efforts of Bevan, and despite it becoming a large part of the housing sector, Bevan never succeeded with the popular image and perception of social housing as he did with the NHS. ‘Council housing always remained the “wobbly pillar” of the welfare state,’ says Lynsey. ‘People, people like you or I, who would not dream of sending their kids to a fee-paying school or using private healthcare, still think we need to get a mortgage and own our own homes.’

The paradigm shift, the seismic break with the certainties and securities of the past, came with the Right to Buy legislation, forced through by Thatcher and her generals with a zeal that far outweighed and outstripped any public desire for it. Like rail privatisation, like the NHS free-market ‘advances’, there was no great appetite among British people for these hacks and slashes to the social and economic fabric. Just long-nurtured grudges and obsessions masquerading as essential reforms, simmering hatreds that were purely partisan and bred in a kind of curtain-twitching fear and suspicion of one’s fellow Britons. Why did Mrs Thatcher and her allies hate the idea of council housing so much? I think there were two dimensions to it. Firstly, there’s no profit in council housing and, by its very nature, capitalism desires profit above all else.

To alleviate that grim poverty, and an associated swamp of crime and disease that ‘decent people’ feared to enter, they built the world’s first council estate here back in 1900, after much campaigning by the Fabian Sidney Webb, liberals like John Benn (Tony’s grandfather) and two leaders of the London dockers’ union. Its design, still attractive, was influenced by John Ruskin and William Morris. A flat in the Boundary Estate now (‘perfect for a professional looking to be close to the City’ says one estate agent’s blurb) will set you back about two and a half grand a month. As John Boughton says, ‘It remains a small working-class redoubt but around 40 per cent of its homes were purchased under Right to Buy and most of these later sold on. The defences of this little island of social housing have been breached, firstly by gentrification and more recently by corporate money.’ Graphic designers outnumber market traders now and the only cutpurses here these days work in the Square Mile and wear Hugo Boss. But on my occasional visits, it’s heartening to see its alleyways and cut-throughs busy with street kids on bikes as well as web designers on tiny scooters.


pages: 505 words: 133,661

Who Owns England?: How We Lost Our Green and Pleasant Land, and How to Take It Back by Guy Shrubsole

back-to-the-land, Beeching cuts, Boris Johnson, Capital in the Twenty-First Century by Thomas Piketty, centre right, congestion charging, deindustrialization, digital map, do-ocracy, Downton Abbey, financial deregulation, fixed income, Goldman Sachs: Vampire Squid, Google Earth, housing crisis, James Dyson, Kickstarter, land reform, land tenure, land value tax, linked data, loadsamoney, mega-rich, mutually assured destruction, new economy, Occupy movement, offshore financial centre, oil shale / tar sands, openstreetmap, place-making, plutocrats, Plutocrats, profit motive, rent-seeking, Right to Buy, Ronald Reagan, sceptred isle, Stewart Brand, the built environment, the map is not the territory, The Wealth of Nations by Adam Smith, trickle-down economics, urban sprawl, web of trust, Yom Kippur War, zero-sum game

Margaret Thatcher might seem a strange choice to introduce a chapter whose focus is land reform and redistribution. But in championing a ‘property-owning democracy’, not only rhetorically but through practical policy, she oversaw a transformation in the ownership of housing during the last quarter of the twentieth century. The year before her conference speech, Thatcher’s government had introduced Right to Buy, giving council house tenants the chance to purchase their home from the local authority. Introducing the legislation to Parliament, Environment Secretary Michael Heseltine claimed that ‘no single piece of legislation has enabled the transfer of so much capital wealth from the State to the people.’ Over the ensuing decade, a million council homes were sold to their tenants. Thatcher’s administrations also enabled millions more to buy private housing by relaxing restraints on bank loans and mortgages, and allowing a supply of cheap and easy credit to flow into property markets.

We also need to learn from Scotland’s recent successful embrace of land reform, and introduce a strong Community Right to Buy in England that allows communities to take back control of land they need. Community groups in England have some existing, rather weak powers in this regard under the Localism Act, such as the ability to designate local ‘assets of community value’ – such as a local pub, post office or library – and a ‘community right to bid’ should that asset come up for sale. But in Scotland, community groups can get first right of refusal to buy any land or property that comes onto the market – as well as access to public funds to help raise the necessary finance. While the Localism Act has in many ways just provided cover for cuts to public services in the name of ‘Big Society’ voluntarism, the Scottish Community Right to Buy hands communities real power. Scottish islands depopulated by the nineteenth-century Clearances are rebuilding themselves by setting up Community Land Trusts and buying out their absentee landlords.

county farms estate For more on county farms, see ‘How the extent of County Farms has halved in 40 years’, 8 June 2018, https://whoownsengland.org­/2018/06/08­/how­-the­-extent­-of-county-f­arms-has-halved­-in-40-years/ See House of Commons Library briefing, ‘Assets of community value’, 28 April 2017, http://researchbriefings.parliament.uk­/ResearchBriefing/Summary/SN06366­#fullreport­ Community right to buy see https://www.gov­.scot/Topics/farmingrural­/Rural­/rural­-land­/right-to-buy/Community The isle of Eigg See Alastair McIntosh, Soil and Soul: People versus Corporate Power (Aurum, 2001). APPENDIX Land area ONS, ‘The Countries of the UK’ [archived content from Jan 2016], http://webarchive.nationalarchives.gov­.uk/20160108051201/ http://www.ons.gov­.uk/ons/guide­-method­/geography­/beginner­-s-guide/administrative/the-countries-of-the-uk/index.html.


pages: 346 words: 90,371

Rethinking the Economics of Land and Housing by Josh Ryan-Collins, Toby Lloyd, Laurie Macfarlane

"Robert Solow", agricultural Revolution, asset-backed security, balance sheet recession, bank run, banking crisis, barriers to entry, basic income, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, debt deflation, deindustrialization, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, full employment, garden city movement, George Akerlof, ghettoisation, Gini coefficient, Hernando de Soto, housing crisis, Hyman Minsky, income inequality, information asymmetry, knowledge worker, labour market flexibility, labour mobility, land reform, land tenure, land value tax, Landlord’s Game, low skilled workers, market bubble, market clearing, Martin Wolf, means of production, money market fund, mortgage debt, negative equity, Network effects, new economy, New Urbanism, Northern Rock, offshore financial centre, Pareto efficiency, place-making, price stability, profit maximization, quantitative easing, rent control, rent-seeking, Richard Florida, Right to Buy, rising living standards, risk tolerance, Second Machine Age, secular stagnation, shareholder value, the built environment, The Great Moderation, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, universal basic income, urban planning, urban sprawl, working poor, working-age population

In the years following the policy’s introduction there were proportionately fewer purchases of less popular types of housing such as high-rise flats, and as a result local authorities were generally left with homes of lower quality (Forrest and Murie, 1986). Moreover, as wealthier tenants were better placed to take up the Right to Buy, the social rented sector saw a greater concentration of the poorest and most disadvantaged households. While in 1979 20% of households in the top decile of the income distribution lived in social housing, by 2004‒–05 this had fallen to close to zero (Hills, 2007). This phenomenon has been described as the ‘residualisation’ of the social rented sector (Stephens et al., 2005). Right to Buy has also been criticised for representing poor value for money for taxpayers who funded the initial building of the council houses, subsidised the substantial discounts offered to tenants and then – once the homes were sold – missed out on the rental income that would otherwise have been received.

Inspired by the party’s strategy in the 1950s, the newly elected government sought to dramatically increase homeownership and achieve the long-held Conservative goal of transforming the country into a ‘property owning democracy’. The first step towards this came in October 1980 when the government passed its first Housing Act, launching its flagship ‘Right to Buy’ policy, compelling councils to sell social homes to their occupiers (see Box 4.5). Further reforms completed the transformation of the housing sector. Much remaining council housing was transferred to the housing association sector, largely driven by the political desire to keep official public sector borrowing down. The stage was set for the revival of the private rented sector by the Housing Act of 1988’s removal of rent regulation and introduction of the Assured Shorthold Tenancy.

Under this new, liberal settlement the problem of rent would not be tackled directly at all, but the ability to be on the winning side of the equation would be offered to a greater proportion of society than ever before. Box 4.5 The Right to Buy The Right to Buy allowed public housing tenants to purchase their homes at a heavily discounted price. During Margaret Thatcher’s time in office 1.5 million publicly owned houses were privatised in what she described as ‘one of the most important revolutions of the century’ (Linklater, 2013). This led to a significant rise in owner-occupancy throughout the 1980s and 1990s and a marked decline in the number of people living in the social rented sector. The Right to Buy was controversial from the start and the effects of the policy are still debated today. Some hail it as a great success which provided ownership and an asset with appreciating value to many who would otherwise have been prevented from gaining access to property (Stephens et al., 2005).


pages: 273 words: 83,802

Hostile Environment: How Immigrants Became Scapegoats by Maya Goodfellow

Boris Johnson, British Empire, call centre, collective bargaining, colonial rule, creative destruction, deindustrialization, Donald Trump, European colonialism, falling living standards, G4S, housing crisis, illegal immigration, low skilled workers, mass immigration, megacity, moral panic, open borders, race to the bottom, Right to Buy, Scientific racism, Winter of Discontent, working poor

New Labour made some important and necessary changes to the UK’s economy: the reduction of child poverty, introduction of the minimum wage and the establishment of Sure Start centres made a fundamental difference to peoples’ lives. But armed with their Third Way politics, Labour kept Thatcher’s financial approach intact. Housing is a good example of what that meant in practice. As Thatcher sold off council housing through her Right to Buy policy, there was a steady decline in the number of council houses that were built – never fewer than 17,710 a year – and that continued to plummet, dropping to 7,870 under New Labour’s entire thirteen years in office.16 Between 1997 and 2010, for instance, only 0.3 per cent of all the homes that were built were owned by local authorities. Housing became a commodity, not a right, as the crisis of where to live exploded in the UK. When I ask Mark Serwotka, general secretary of Public and Commercial Services Union (PCS), about New Labour’s economic approach, he is visibly unimpressed.

Alex Balch, Managing Labour Migration in Europe: Ideas, Knowledge and Policy Change, Manchester: Manchester University Press, 2010, p. 111; ‘Who Built More Council Houses – Margaret Thatcher or New Labour?’, fullfact.org, 12 November 2013. 17. Danny Dorling, ‘New Labour and Inequality: Thatcherism Continued?’, Local Economy, vol. 25, issues 5–6, 2010, pp. 397–413. 18. Carys Afoko, Framing the Economy: The Austerity Story, London: New Economics Foundation, 2013; Sally Gainsbury and Sarah Neville, ‘Austerity’s £18bn Impact on Local Services’, Financial Times, 19 July 2015. Between 2010 and 2015, a quarter of the Home Office budget was cut by around 24.9 per cent and there were £18 billion cuts to local authority budgets, amounting to authorities having to get rid of key services for 150,000 pensioners and cutting child protection spending by 8 per cent. 19.

But a coroner’s report that had been written three years after Jimmy’s death said the texts were ‘not evidence of a couple of “rotten apples”’ but seemed to ‘evidence a more pervasive racism within G4S’.18 By the time the report was released, G4S had already been given the asylum housing contract. Before the switch went ahead, a mix of local authorities, housing associations and private contractors had been responsible for the accommodation of asylum seekers. Cross says the shift away from local authorities was ‘very obvious’ and the private sector offered much lower cost contracts, but that came with ‘absolute pairing down in the contracts’. Support for people was ‘pretty much annihilated’, putting more pressure on organisations like WERS. Though these private companies claim to take housing quality into account, there is a growing body evidence to the contrary.


pages: 872 words: 259,208

A History of Modern Britain by Andrew Marr

air freight, Albert Einstein, anti-communist, battle of ideas, Beeching cuts, Big bang: deregulation of the City of London, Bob Geldof, Bretton Woods, British Empire, Brixton riot, clean water, collective bargaining, computer age, congestion charging, cuban missile crisis, deindustrialization, Etonian, falling living standards, fear of failure, Fellow of the Royal Society, financial independence, floating exchange rates, full employment, housing crisis, illegal immigration, Kickstarter, liberal capitalism, Live Aid, loadsamoney, market design, mass immigration, means of production, Mikhail Gorbachev, millennium bug, Neil Kinnock, Nelson Mandela, new economy, North Sea oil, Northern Rock, offshore financial centre, open borders, out of africa, Parkinson's law, Piper Alpha, Red Clydeside, reserve currency, Right to Buy, road to serfdom, Ronald Reagan, Silicon Valley, strikebreaker, upwardly mobile, Winter of Discontent, working poor, Yom Kippur War

This is a fair clue to the economic experiment which began immediately after she took office in 1979 and provides the first, the most important, and still the most controversial part of her story. An attentive reader of the Conservative manifesto for the 1979 election would have missed it. After four years of her leadership the Tories were still talking about a wages policy and the importance of consulting with the trade unions, perhaps on the German model. There was talk too of the need to control the money supply and offer council house tenants the right to buy their homes. But other privatization barely featured. Only the comparatively insignificant National Freight Corporation was to be sold. As to unemployment, Mrs Thatcher herself had been vigorously attacking the Labour government for its failure there. In 1977, when it stood at 1.3 million, she had told the country it was absolutely wrong to associate the Tories with people losing their jobs: ‘We would have been drummed out of office if we’d had this level of unemployment.’

There was now to be a large and immovably pro-private sector Britain of share-owners and home-owners, probably working in private companies and increasingly un-unionized. The cost of renationalizing the industries made Labour pledges about it increasingly hollow. Twenty years later the idea of reversing privatization is something discussed only on the very margins of politics. The proportion of adults holding shares rose from 7 per cent when Labour left office, to 25 per cent when Thatcher did. Thanks to the ‘right to buy’ policy, more than a million families purchased their council houses, repainting and refurbishing them and watching their value shoot up, particularly since they had been sold them at a discount of between 33 and 50 per cent. The proportion of owner-occupied homes rose from 55 per cent of the total in 1979 to 67 per cent a decade later. And people did indeed become much wealthier, overall, during the Tory years. In real terms, total personal wealth rose by 80 per cent in the eighties, entirely changing the terms of trade of ordinary politics.

People did complain about rabbit hutches or tin boxes but for many they were hugely welcome. The future Labour leader Neil Kinnock lived in one, an Arcon V, from 1947 until 1961, and remembered the fitted fridge and bathroom causing much jealousy: ‘Friends and family came to view the wonders. It seemed like living in a spaceship.’ As they spread around the country, in almost all the big cities and many smaller ones too, they came to be regarded as better than bog-standard council housing. Communities developed in prefab estates which survived cheerfully well into the seventies. Dirty Stubs to Rich Spikes The great grey stubs of the tower-block boom which ran from the fifties to the late sixties litter most of urban Britain. Never has newness turned dark so quickly. Rarely has revolutionary optimism been so quickly and abjectly confounded. This revolution was born, like others, on the European continent and imported to Britain a generation after the prophets of concrete modernism had spoken.


pages: 543 words: 147,357

Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society by Will Hutton

Andrei Shleifer, asset-backed security, bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Blythe Masters, Boris Johnson, Bretton Woods, business cycle, capital controls, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, choice architecture, cloud computing, collective bargaining, conceptual framework, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, debt deflation, decarbonisation, Deng Xiaoping, discovery of DNA, discovery of the americas, discrete time, diversification, double helix, Edward Glaeser, financial deregulation, financial innovation, financial intermediation, first-past-the-post, floating exchange rates, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, Hyman Minsky, I think there is a world market for maybe five computers, income inequality, inflation targeting, interest rate swap, invisible hand, Isaac Newton, James Dyson, James Watt: steam engine, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liberal capitalism, light touch regulation, Long Term Capital Management, Louis Pasteur, low cost airline, low-wage service sector, mandelbrot fractal, margin call, market fundamentalism, Martin Wolf, mass immigration, means of production, Mikhail Gorbachev, millennium bug, money market fund, moral hazard, moral panic, mortgage debt, Myron Scholes, Neil Kinnock, new economy, Northern Rock, offshore financial centre, open economy, plutocrats, Plutocrats, price discrimination, private sector deleveraging, purchasing power parity, quantitative easing, race to the bottom, railway mania, random walk, rent-seeking, reserve currency, Richard Thaler, Right to Buy, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, Rory Sutherland, Satyajit Das, shareholder value, short selling, Silicon Valley, Skype, South Sea Bubble, Steve Jobs, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, unpaid internship, value at risk, Vilfredo Pareto, Washington Consensus, wealth creators, working poor, zero-sum game, éminence grise

And when the two coincide the result is doubly deadly.31 The symbols are no longer court shoes, pocket watches and received pronunciation but much more subtle: reading broadsheet newspapers, eating fresh vegetables, knowing what is on in the theatre, and the post-code in which you live. The clustering of advantage and disadvantage is huge.32 There are neighbourhood effects: increasingly, the poor live in the same wards and housing estates so they are less dispersed throughout the whole community. Thatcher’s introduction of the right to buy council houses may have extended owner occupation, but it had the disastrous social consequence of dividing the working class into the employed mortgage-paying haves and the non-mortgage-paying have-nots. In 1979, 40 per cent of the adult population lived in the social rented sector; today, that figure is just 12 per cent. Most of the desirable housing has been sold off and the remainder increasingly comprises large, soulless housing estates with dense concentrations of people who live on benefit.

The owners and managers had indulged the unworthy inmates by giving them good bread and allowing them to go outside during the day. An equivalent complaint today would be that a local authority had sent poor children on a week’s holiday to Blackpool.21 The Mayhew/Daily Mail view of the poor still has its pitch-perfect followers today, but now they are arguably even more callous. For all his pigeon-holing of the poor, at least Mayhew was so concerned by the phenomenon that he documented their plight and daily lives with accuracy and enormous depth. Today the poor are simply written off as caricatures and mocked as a tribal underclass. The outburst of malicious jokes about chavs – council housed and vile – in the mid-2000s was a classic example. No attempt was made to understand the lifestyles and choices of this newly stigmatised subculture.

Even worse, the electorate tends to vote for councillors on national rather than local issues, not least because they have so little local power. Thus, after a long period of Conservative government, by 1997 there were very few Tory councillors because of anti-(national) Tory voting. Labour found itself in a mirror-image position by 2010. There has already been a shift of power to local authorities, but the trend should be accelerated.32 Local authorities should be able to raise between a third and a half of their revenue from local sales, property and income taxes, and they should be able to design their own spending plans. There should be genuine experimentation in a plethora of social, educational, health and policing policies. In other words, the role of local councillor should become more significant and their pay should rise, which would attract better candidates.


pages: 223 words: 10,010

The Cost of Inequality: Why Economic Equality Is Essential for Recovery by Stewart Lansley

"Robert Solow", banking crisis, Basel III, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Branko Milanovic, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, collective bargaining, corporate governance, corporate raider, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, Edward Glaeser, Everybody Ought to Be Rich, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, Goldman Sachs: Vampire Squid, high net worth, hiring and firing, Hyman Minsky, income inequality, James Dyson, Jeff Bezos, job automation, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, laissez-faire capitalism, light touch regulation, Long Term Capital Management, low skilled workers, manufacturing employment, market bubble, Martin Wolf, mittelstand, mobile money, Mont Pelerin Society, Myron Scholes, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, Right to Buy, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, Tyler Cowen: Great Stagnation, Washington Consensus, Winter of Discontent, working-age population

By the mid-1990s, what one commentator has described as an ‘almost unassailable mantra’ had become almost universal in British boardrooms.175 To encourage managers to take this direction, a new form of remuneration package was introduced, one in which executives were paid increasingly in stock options. This was, at least initially, seen by the American management gurus who promoted the idea as a way of linking executive pay to company success as measured by changes in the share price. Stock options—which operate by giving an executive the right to buy a given amount of stock at a certain price at a later date—provided a very strong incentive to top executives to maximise the share price as that was the mechanism by which they would be paid. By 2001, more than half of America’s top 200 chief executives had ‘mega-options’, which by now had grown to an average value of more than $50 million. In this way, executives were able to build personal fortunes on a scale previously enjoyed only by entrepreneurs.

Challenge, September, 2002. 256 Guardian, 19.11.03. 257 Time, 26 February, 2011. 258 H Williams, Britain’s Power Elites, Constable, 2006, p 164. 259 N Matthiason & Y Bessaoud, Growth in City Donations to the Conservative Party, Bureau for Investigative Journalism, February 2011. 260 CRESC, 2009, op. cit. p 23. 261 G Soros, ‘The Crisis and What to do About It’, New York Review of Books, 4 December, 2008. 7 LIVING ON BORROWED TIME One evening in late 2004, a couple who had been living in a small council house in Bradford for ten years got an unexpected knock on the door from a mortgage salesman. The broker, working on commission, was cold calling people on the estate to see if they could be persuaded to buy their council house. The couple, aged 53 and 58, were both unemployed and living on benefits. One suffered from chronic arthritis while the other had only one lung. Although they were hardly strong candidates to take out a mortgage, they were given the hard sell and signed the papers that evening. A few weeks later, they started payments on a 25-year £55,000 mortgage provided by a Manchester-based bank called London Scottish.

Although the couple were told the repayments would be no more than the rent, this was only true for the first twelve months. A year on reality set in. The repayments rose sharply, the couple fell into arrears and the lender tried to repossess their home. They were only saved from eviction with the help of their family and a new payment plan which still absorbed a very large chunk of the couple’s benefits. The same year, a 55-year old lady living in a council house in Cheshire was approached in a similar way by another ‘door-to-door’ mortgage broker working for Home and County Mortgages Ltd, a Cheshire-based company specializing in right-tobuy-sales. The lady was a part-time cook working for the local council, with both very modest earnings and a history of credit problems. Because her earnings were insufficient to get a normal mortgage, she was persuaded to take out a self-certificated loan, one where very limited, if any, checks are made on declared earnings.


pages: 369 words: 120,636

Commuter City: How the Railways Shaped London by David Wragg

Beeching cuts, Boris Johnson, British Empire, financial independence, joint-stock company, joint-stock limited liability company, Louis Blériot, North Sea oil, railway mania, Right to Buy, South Sea Bubble, urban sprawl, V2 rocket, Winter of Discontent, yield management

Another unforeseen but inevitable result of this was that many operators failed to invest in modernisation of their trams or their infrastructure for fear that they would in effect be making a gift of their investment to the local authority. Many of the tram companies found the exacting demands of the legislation onerous and there were undoubtedly those who were glad to be relieved of the burden of tram ownership. Cheap fares did attract the volume of traffic, but costly tram networks needed to be kept busy all day. Unlike the railways, there was no goods traffic to augment revenues, and unlike the railways, their responsibilities did not end with the track and the vehicles. Not every tram company saw matters in this way. When the Provincial concern was forced off Portsea Island after Portsmouth Corporation exercised its right to buy, the company immediately crossed to the other side of the harbour and set up an operation running between Gosport and Fareham, happily in not one but two adjoining council areas which made municipal ownership more difficult.

Schoolboys used to take a delight in swinging their satchels through the air and against seats to send a cloud of soot and dust into the air of an already murky compartment. The allure of the suburbs Wartime had not only interrupted railway modernisation, and especially electrification, it had also stopped housing development, whether it was the private estates built by developers or the slum clearance public or council housing planned by local authorities. While the London County Council had built new estates at places such as Streatham, the supply of building land within its area was already scarce during the 1930s and so it had started to build ‘out-county’ estates, with those at Becontree, St Helier and Downham becoming three of the largest public housing estates in the world by the outbreak of war in 1939. Faced with large numbers of homeless families who had been bombed out of their homes, the need for new housing post-war was even more acute, and for a while slum clearance was put on hold while the dispossessed were housed.

Indeed, in some places, such as Carlisle, the city imposed its ancient right to charge a duty on everything entering its boundaries, and then again on everything leaving. Local authority rates were another matter, and the railways were rated very heavily for the amount of land that they occupied, as local authorities saw the railway as a cash cow to be milked. One of the best examples of this was at Huyton, near Liverpool, where in 1849 the London & North Western Railway provided 35 per cent of the rates paid to the parish council, despite occupying less than 1 per cent of the land. The system of rating for the railways had to evolve, and it took case law to decide on a fair basis, with the rental value of stations and other premises used as a basis for the rates, but for the actual length of line, the local authorities based their charges on the companies’ receipts, making it more of a local tax or duty than rates.


pages: 401 words: 112,784

Hard Times: The Divisive Toll of the Economic Slump by Tom Clark, Anthony Heath

Affordable Care Act / Obamacare, British Empire, business cycle, Carmen Reinhart, credit crunch, Daniel Kahneman / Amos Tversky, debt deflation, deindustrialization, Etonian, eurozone crisis, falling living standards, full employment, Gini coefficient, hedonic treadmill, hiring and firing, income inequality, interest rate swap, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, low skilled workers, MITM: man-in-the-middle, mortgage debt, new economy, Northern Rock, obamacare, oil shock, plutocrats, Plutocrats, price stability, quantitative easing, Right to Buy, Ronald Reagan, science of happiness, statistical model, The Wealth of Nations by Adam Smith, unconventional monetary instruments, War on Poverty, We are the 99%, women in the workforce, working poor

Already by the time of the census in 2011, home ownership was down 5 percentage points on the last nationwide count in 2001, the first such decline in a century.15 Looking ahead, the National Housing Federation projects that the 73% of the English population that lived in owner-occupied housing in 2001 will fall to just 64% in 2021, returning the statistic to where it stood in the first days of Margaret Thatcher's ‘right to buy’.16 When John Prescott, the seaman turned deputy prime minister, made headlines in the 1990s by revealing that (surprise, surprise!) with his MP's salary he no longer lived a working-class life, he was widely misquoted as having said ‘We're all middle class now’. In fact, he remained far too mindful of Britain's social divisions to have made such a claim; but the misattribution stuck because it seemed somehow to capture the spirit of the times and – so he told me – the message that parts of the Labour high command were trying to put across.17 The promise that the great bulk of society could be on its way up at the same time was always questionable (and indeed questioned); but half a generation ago it had sufficient credibility to be regarded as winning political rhetoric.

On the suicide note story, see Keir Mudie and Nigel Nelson, ‘Bedroom Tax victim commits suicide: Grandmother Stephanie Bottrill blames government in tragic note’, Daily Mirror, 12 May 2013, at: www.mirror.co.uk/news/uk-news/suicide-bedroom-tax-victim-stephanie–1883600#ixzz2efG7r8A0 On the UN representative's intervention, see Amelia Gentleman, ‘“Shocking” bedroom tax should be axed, says UN investigator’, Guardian, 11 September 2013, at: www.theguardian.com/society/2013/sep/11/bedroom-tax-should-be-axed-says-un-investigator 58. The exact number is 1.85 million. Department for Communities/Office for National Statistics, ‘Local authority housing statistics: 2011–12’, 2012, at: www.gov.uk/government/uploads/system/uploads/attac­hment_data/file/39457/Local_authority_hous­ing_statistics_2011_12_v4.pdf 59. Zedlewski et al., Families Coping Without Earnings, pp. viii, 8–13. Chapter 9: The veil of complacency 1. Jahoda et al., Marienthal, pp. 19, 43–4. 2. Orwell, The Road to Wigan Pier, p. 70. 3. John Rawls, A Theory of Justice, Harvard University Press, Cambridge, MA, 1971. 4. Franklin Roosevelt, Second Inaugural Address, 20 January 1937. 5.

He promptly submitted job-seeking log books and a letter to explain the oversight, but to no avail. ‘Winston’ is – proudly and remarkably – free of debt, though only, he says, because he was brought up to save for a buffer against rainy days. But ‘since I suffered the sanction’, he explains, ‘I had to use what little money I had saved’. His past thrift no longer offers any protection; he is facing hard times entirely exposed. With the council's housing office and the revenue's child tax credit office in similarly mean-spirited mood to the job centre, he tells Kafkaesque tales of letters going missing between bureaucracies and of the arrival of missives summoning him to appointments on dates that have already passed. He sums up the last six months as time spent ‘lost in the department of work and pensions’. As the retrenchment of private industry in the initial recession was slowly replaced by the public retrenchment of the Coalition's cuts between 2011 and 2013, our analysis of hundreds of thousands of YouGov market research interviews suggests that, while the financial mood of the nation stabilised, the public's feelings about family, friends and community continued to darken.55 And, in the case of people like ‘Winston’, the link between such pessimism and the stance of the public authorities is not hard to grasp.


pages: 92

The Liberal Moment by Nick Clegg, Demos (organization : London, England)

banking crisis, credit crunch, failed state, housing crisis, income inequality, mass immigration, mass incarceration, Right to Buy, smart grid, too big to fail, Winter of Discontent

Social housing is disappearing because of the nationally-imposed Right to Buy and Whitehall restrictions on councils’ ability to invest in building new homes to replace those sold off. Both were introduced by the Conservatives but Labour did almost nothing to reverse the trends, even imposing extra constraints on councils in relation to the Decent Homes investment. As for the house price bubble: it was heavily influenced by the failure to regulate mortgage provision properly, with Labour refusing to intervene to disperse power away from the debt-providers and towards home buyers. Liberal Democrats would approach housing differently, dispersing power away from the big mortgage providers and central government to provide a more stable market and more diverse safety net. Local authorities would be able to borrow on their own assets to build new social housing, we would ensure homes sold under Right to Buy are replaced locally, and would use the planning system to give power back to local communities so that they can shape local development to build the homes they need.

Local authorities would be able to borrow on their own assets to build new social housing, we would ensure homes sold under Right to Buy are replaced locally, and would use the planning system to give power back to local communities so that they can shape local development to build the homes they need. We would regulate mortgages more closely and make the social crisis the Bank of England take house prices into account when setting interest rates to reduce the likelihood of another house price bubble. Only by doing so will we ensure that house prices do not again stretch beyond the reach of ordinary people, creating a permanent social divide between home owners and renters, the haves and have-nots of the property ladder. 71 8 The security crisis Security has often been referred to as the first duty of the state. For progressives, security is important because without it there is little capacity for progress of any kind.

Ours is the most centralised country in Europe outside Malta, when measured by the control over money spent at a local level. Only a country that is home to fewer people than the 47 London Borough of Croydon hoards as much power at the centre as this Labour Government. Even the Parliaments and Assemblies in Scotland, Wales, Northern Ireland and London have limited roles, while elsewhere in England local authorities have become agents for central government.31 Every major policy being delivered by councils today has ‘Made in Whitehall’ stamped on it, while 75 per cent of local authorities’ income comes from central coffers.32 As ever, power follows money; devoid of the freedom to raise the second, Councils are unable to exercise the first. There was a time when Labour was the champion of change to this system, the great hope that politics could be reinvigorated, with power devolved so people had a real say in what happened to their communities.


pages: 282 words: 89,266

Content Provider: Selected Short Prose Pieces, 2011–2016 by Stewart Lee

accounting loophole / creative accounting, Boris Johnson, call centre, centre right, David Attenborough, Etonian, James Dyson, Livingstone, I presume, Mark Zuckerberg, mass immigration, Nelson Mandela, offshore financial centre, plutocrats, Plutocrats, pre–internet, Right to Buy, Robert Gordon, Saturday Night Live, sensible shoes, Socratic dialogue, trickle-down economics, wage slave, young professional

I could only imagine what hard work looked like, though I had seen an arts cinema screening of Alexander Dovzhenko’s 1930 Soviet propaganda film Earth, about the hardships of Russian agricultural labourers, which gave me a fair idea. Back then, I knew nothing about anything, admittedly. Maybe Margaret Thatcher was right to hasten the demise of an outdated mining industry, to sell off nationalised concerns to private investors, to enfranchise council-house occupants with the right to buy, to neutralise the National Front by appropriating some of its rhetoric, and to leave apartheid unopposed. I was a teenager. I don’t know. At some point in the middle of the decade I discovered alcohol and I wasn’t paying attention. I experienced and understood the world exclusively through the passive assimilation of culture. And culture, it appeared, hated Thatcher. Musicians hated Thatcher.

In Oxford the lady on the stage door talked about her son going to college in Coventry, and I said how few of the people I knew would have studied if it had cost what it costs today, and how the circumstances, and attitudes to education as an end in itself, that saw generations of people from different backgrounds into and through university no longer exist. And she countered my abstract worthy meditation on social privilege by telling me she had grown up on Oxford’s Cutteslowe estate. In 1934, after clearances had moved former slum-dwellers into new council housing appended to a prosperous suburb, the prestigious Urban Housing Company unilaterally erected a succession of two-metre-high spiked walls across the public roads to keep the working classes out of their betters’ sights. And these stayed in place until 1959. The Beatles were coming, and punk rock, and contraception, and the Open University, and student grants. Those walls wouldn’t have stood a chance anyway.


pages: 502 words: 128,126

Rule Britannia: Brexit and the End of Empire by Danny Dorling, Sally Tomlinson

3D printing, Ada Lovelace, Alfred Russel Wallace, anti-communist, anti-globalists, Big bang: deregulation of the City of London, Boris Johnson, British Empire, centre right, colonial rule, Corn Laws, correlation does not imply causation, David Ricardo: comparative advantage, deindustrialization, Dominic Cummings, Donald Trump, Edward Snowden, en.wikipedia.org, epigenetics, Etonian, falling living standards, Flynn Effect, housing crisis, illegal immigration, imperial preference, income inequality, inflation targeting, invisible hand, knowledge economy, market fundamentalism, mass immigration, megacity, New Urbanism, Nick Leeson, North Sea oil, offshore financial centre, out of africa, Right to Buy, Ronald Reagan, Silicon Valley, South China Sea, sovereign wealth fund, spinning jenny, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas Malthus, University of East Anglia, We are the 99%, wealth creators

But all this did was spur UKIP to set out its plans for withdrawal from the EU and the removal of benefits from EU workers and foreign citizens, along with a raft of right-wing domestic policies. At the very same time, private landlords in London were raising rents to new peaks. The average rent for a London home increased from £1,250 a month in 2007 to £1,600 a month by 2017 (higher than UK median income after tax). This was not because they had to, or needed to, but just because they could. The availability of social housing continued to fall, with the right-to-buy policy on council housing continuing uninterrupted and occurring fastest where there was most need for housing. In contrast to London, rents in the north-east, Yorkshire and Humberside and the north-west of England were now three times less a month as compared to those in the capital, actually falling over the course of the decade in the north-east of England. Ironically, it was later shown that where the cost of housing had increased the least was where people voted most strongly to leave the EU.50 Voting for Leave was similarly much higher in areas with low levels of immigration.

That particular letter was signed off ‘Heil Hitler’. In 1986, a local authority advisor asked 300 Tyneside pupils to write an essay on ‘black people’ and found 75 per cent held negative views, of whom 25 per cent were very hostile, with a repatriation theme emerging strongly. For example: ‘Black people mostly come from Africa. They started taking our jobs and making everybody unemployed. I think anyone who even looks black should be deported’; and ‘I think the Pakis steal jobs from the English’; or ‘Coloured people from different countries should be chucked out of our country.’39 A year earlier, in 1985, the report of the committee headed by Lord Swann on Education for All also told a story of how the authors of that report had sent local authority inspectors to visit schools with few or no minorities.

He admits to an obsession with Ayn Rand, the poster girl of a particularly hardcore brand of free-market fundamentalism – the advocate of a philosophy she called ‘the virtue of selfishness’.36 It is widely reported that Javid earnt up to £3 million a year as a banker, owning property in London worth in excess of £6 million, though he has never confirmed these claims.37 He regularly attends secretive neocon conferences in the USA.38 Natalie Evans [10], life peer and currently Lord Privy Seal and Leader of the House of Lords, became the director of the charity New Schools Network in 2013.39 The organisation encouraged the establishment of free schools outside the normal local authority provision, using state funds. In 2010, the Charity Commission had to remind the trustees of their responsibility to remain politically impartial. This might now be tricky considering Evans is a government appointee in the Lords, and her husband a Conservative special advisor.40 In 2015, amid much criticism of free schools, Labour Party policy-makers agreed not to fund any new free schools. It doesn’t take a genius to work out what mayhem is caused by funding a small group of parents or a religious group to establish their own school, unplanned by the local authority and without regard for neighbouring schools. Of course, if the object is to create such mayhem, and do down well-planned state schooling, then the logic is clearer.


pages: 322 words: 77,341

I.O.U.: Why Everyone Owes Everyone and No One Can Pay by John Lanchester

asset-backed security, bank run, banking crisis, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black-Scholes formula, Blythe Masters, Celtic Tiger, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, diversified portfolio, double entry bookkeeping, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, George Akerlof, greed is good, hedonic treadmill, hindsight bias, housing crisis, Hyman Minsky, intangible asset, interest rate swap, invisible hand, Jane Jacobs, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, Kickstarter, laissez-faire capitalism, light touch regulation, liquidity trap, Long Term Capital Management, loss aversion, Martin Wolf, money market fund, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, negative equity, new economy, Nick Leeson, Norman Mailer, Northern Rock, Own Your Own Home, Ponzi scheme, quantitative easing, reserve currency, Right to Buy, risk-adjusted returns, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, South Sea Bubble, statistical model, The Great Moderation, the payments system, too big to fail, tulip mania, value at risk

Just as experimental science had its roots in alchemy, so the study of probability had its roots in gambling: the first investigations into risk grew out of the curiosity of gamblers. Chance, and risk, began to be things which could be managed. An essential tool in doing so would be the category of financial instruments called derivatives. Derivatives themselves are a long-standing feature of financial markets. At their simplest, a farmer will agree to a price for his next harvest a few months in advance; and the right to buy this harvest is a derivative, which can itself be sold. The name comes from the fact that a derivative’s value derives from the underlying products. Today, the simplest forms of derivatives are options and futures. An option gives you the right, but not the obligation, to either buy or sell something at a specified future date for a specified price. Example: You spend $500 on an option to buy a Ferrari for $50,000 in a year’s time.

The United Kingdom and United States are two of those countries. This isn’t exclusively, or even primarily, a preoccupation of the political left. In Britain, it was Margaret Thatcher who spoke of a vision of a “property-owning democracy” and who, more energetically than any other modern politician, pursued policies designed to increase the level of home ownership, extending mortgage tax relief and introducing a new right for council-house tenants to buy their own homes. There was a strong political tinge to these ideas, involving the belief that home owners were—to put it bluntly—more likely to be both small c and big C conservative. In America, it was the unlikely figure of Herbert Hoover who began the drive to create government policies favoring home ownership.1 Hoover would later be a model of complacent conservatism at its sleepiest, which is why it’s all the odder that he saw home ownership as such a crusade.


pages: 261 words: 86,905

How to Speak Money: What the Money People Say--And What It Really Means by John Lanchester

asset allocation, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, blood diamonds, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collective bargaining, commoditize, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Dava Sobel, David Graeber, disintermediation, double entry bookkeeping, en.wikipedia.org, estate planning, financial innovation, Flash crash, forward guidance, Gini coefficient, global reserve currency, high net worth, High speed trading, hindsight bias, income inequality, inflation targeting, interest rate swap, Isaac Newton, Jaron Lanier, joint-stock company, joint-stock limited liability company, Kodak vs Instagram, liquidity trap, London Interbank Offered Rate, London Whale, loss aversion, margin call, McJob, means of production, microcredit, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, negative equity, neoliberal agenda, New Urbanism, Nick Leeson, Nikolai Kondratiev, Nixon shock, Northern Rock, offshore financial centre, oil shock, open economy, paradox of thrift, plutocrats, Plutocrats, Ponzi scheme, purchasing power parity, pushing on a string, quantitative easing, random walk, rent-seeking, reserve currency, Richard Feynman, Right to Buy, road to serfdom, Ronald Reagan, Satoshi Nakamoto, security theater, shareholder value, Silicon Valley, six sigma, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Jobs, survivorship bias, The Chicago School, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, trickle-down economics, Washington Consensus, wealth creators, working poor, yield curve

If you made the same choice, but the share you didn’t buy went up, that was a Chinese loss—you’d lost compared with what would have happened. That is a vivid practical way of thinking about opportunity costs. options A type of financial derivative that gives the holder the right, but not the obligation, to buy or sell something at a specific price on a specific date. Apple shares today are $420. Say you think that Apple’s share price is going up. You buy the right to buy Apple shares for $500 in six months’ time. If Apple shares have risen to $550, then when the time comes you buy them for $500 and sell them for $550 and have made an immediate profit; if the share price is less than $500, you don’t exercise your option and instead just walk away, and all you’ve lost is the cost of the option. The same process works in reverse: you can buy an option to sell the share when it’s falling.

The provision of employment and training for apprentices is an explicit part of this. There will need to be a sharp increase in levels of social housing. The role model here is Singapore, which as well as consistently being voted the most open economy in the world—a beacon to free marketers everywhere—has the highest level of state and social housing in the world. The world capital of the free market is also the world capital of council houses. Not all the lessons of Singapore are about free markets. More generally, there will need to be a focus on material well-being in the round, and broader measures of quality of life than the mere narrow focus on GDP. In Denmark, a judge earns more than a cleaner: two and a half times more.89 How does that work out for them? The Danes report the highest level of life satisfaction of anyone in the world.


pages: 283 words: 87,166

Reaching for Utopia: Making Sense of an Age of Upheaval by Jason Cowley

anti-communist, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, Boris Johnson, centre right, Charles Lindbergh, coherent worldview, Corn Laws, corporate governance, crony capitalism, David Brooks, deindustrialization, deskilling, Donald Trump, Etonian, eurozone crisis, Fall of the Berlin Wall, illegal immigration, liberal world order, Neil Kinnock, Occupy movement, offshore financial centre, old-boy network, open borders, plutocrats, Plutocrats, Right to Buy, Robert Mercer, Ronald Reagan, University of East Anglia

My classmates’ parents had, for the most part, come from the East End or the poorer parts of north London, such as Edmonton or Walthamstow, and many worked in the town’s factories and manufacturing plants – the International Telephone and Telegraph Corporation (which by the end of the 1970s employed eight thousand people), the Cossor Group, Revertex Chemicals, Johnson Matthey Metals, Schreiber, Pitney Bowes, United Glass. These companies had their own social clubs and sports teams, even boys’ football teams, which I played against in the recreational league for Newtown Spartak, a name more redolent of the Soviet Union. Before the introduction of Margaret Thatcher’s Right to Buy scheme, which enabled tenants to buy their council house at a large discount, most of the houses in the town were owned by the town corporation. (Even today, a third of the housing stock is council-owned.) Yet from 1972 we owned our house, and lived on one of the few private developments, or executive estates as they were known. This set us apart somewhat. This and the fact that my father did not work locally but commuted to London, driving there in his Alfa Romeo rather than take the train.


pages: 471 words: 109,267

The Verdict: Did Labour Change Britain? by Polly Toynbee, David Walker

banking crisis, Big bang: deregulation of the City of London, Bob Geldof, Boris Johnson, call centre, central bank independence, congestion charging, Corn Laws, Credit Default Swap, decarbonisation, deglobalization, deindustrialization, Etonian, failed state, first-past-the-post, Frank Gehry, gender pay gap, Gini coefficient, high net worth, hiring and firing, illegal immigration, income inequality, Intergovernmental Panel on Climate Change (IPCC), knowledge economy, labour market flexibility, market bubble, mass immigration, millennium bug, moral panic, North Sea oil, Northern Rock, offshore financial centre, pension reform, plutocrats, Plutocrats, Ponzi scheme, profit maximization, purchasing power parity, Right to Buy, shareholder value, Skype, smart meter, stem cell, The Spirit Level, too big to fail, University of East Anglia, working-age population, Y2K

Nothing was done about the growing anomalies of the hated council tax, neither a full-blown property tax of the kind most other countries had, nor a local tax on income. If Whitehall provided 80 per cent of local funding, councils’ autonomy was necessarily going to be limited. Further inquiries only repeated the question. Labour gave councils freedom to spend funds from housing sales under the Right to Buy and to borrow ‘prudentially’. The Local Government Act 2000 ended personal surcharges for councillors, fining them for decisions taken in office, unlike anything that applied to MPs or ministers. Instead, councillors were to answer for their conduct to a new quango, the Standards Board for England. It promptly pursued a Cornish councillor for making disparaging remarks about a constituent’s home baking.

The judges, usually cautious, also used the HRA to fix a right to privacy in cases involving Naomi Campbell and Max Mosley. Government and public had black-and-white notions of security yet were uncertain when a right to protection against something became an entitlement to a service or benefit. The HRA and the judges were confused too. How could the statute give a Somali migrant a right to a council house? Could you have a claim on something that elected representatives had built, after complex decisions about tax, spending and need? The public, egged on by the media, were aghast: ‘rights’ offended embedded ideas of fairness. But the public were also dead keen on their own rights in context. Labour mishandled the politics, reacting petulantly to adverse judicial decisions under the HRA and blankly refusing to explain to an increasingly hostile public the teasing ambiguities at the heart of the enterprise.

Half the pupils were on free school meals, and they spoke between them sixty-five languages. They included both the children of diplomats from war-torn Somalia or Iran, who benefit from strong encouragement from parents, and the children of poor rural foreign families not literate even in their own language. Migration into the eastern part of Enfield was big and fast, yet far from unusual. It was a tiny miracle that the local authority coped so well and it is puzzling how little impact this social transformation had on borough politics. In theory Oakthorpe’s eleven-year-olds could choose the borough’s surviving state-maintained grammar school. Or rather, it might choose them, if they passed its tests. English secondary education remained partially selective and the survival of the grammars proved how confused the government was.


pages: 475 words: 155,554

The Default Line: The Inside Story of People, Banks and Entire Nations on the Edge by Faisal Islam

Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, Basel III, Ben Bernanke: helicopter money, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, British Empire, capital controls, carbon footprint, Celtic Tiger, central bank independence, centre right, collapse of Lehman Brothers, credit crunch, Credit Default Swap, crony capitalism, dark matter, deindustrialization, Deng Xiaoping, disintermediation, energy security, Eugene Fama: efficient market hypothesis, eurozone crisis, financial deregulation, financial innovation, financial repression, floating exchange rates, forensic accounting, forward guidance, full employment, G4S, ghettoisation, global rebalancing, global reserve currency, hiring and firing, inflation targeting, Irish property bubble, Just-in-time delivery, labour market flexibility, light touch regulation, London Whale, Long Term Capital Management, margin call, market clearing, megacity, Mikhail Gorbachev, mini-job, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, negative equity, North Sea oil, Northern Rock, offshore financial centre, open economy, paradox of thrift, Pearl River Delta, pension reform, price mechanism, price stability, profit motive, quantitative easing, quantitative trading / quantitative finance, race to the bottom, regulatory arbitrage, reserve currency, reshoring, Right to Buy, rising living standards, Ronald Reagan, savings glut, shareholder value, sovereign wealth fund, The Chicago School, the payments system, too big to fail, trade route, transaction costs, two tier labour market, unorthodox policies, uranium enrichment, urban planning, value at risk, WikiLeaks, working-age population, zero-sum game

The ‘property-owning democracy’, as Mrs Thatcher defined it, is over. She inherited home ownership levels of 57 per cent, which rose to 65 per cent as the first of 2 million council homes were sold under her ‘Right To Buy’ policy. Home ownership reached 71 per cent, at which point Gordon Brown voiced the aspiration that it rise to 80 per cent. It is now back down to 65 per cent. It might be reasonable to suggest Right to Buy was a generational giveaway to Britons born in the 1950s and 1960s. It seems difficult to imagine how it could be repeated. If you strip out the ‘one-off’ of Right To Buy sales, the like-for-like percentage is now already below Mrs Thatcher’s 57 per cent. Lastly, if – as some bond traders believe – the 1.3 million Britons with an interest-only mortgage and an inadequate repayment vehicle are enduring ‘glorified renting’, then you can take the home ownership figure down to around 50 per cent, or where we were in 1971 – or roughly German levels.

Progressive voices keen to redistribute through benefits have said very little about the overarching negative redistribution caused by the trebling of house prices. All political parties claim to want to foster ‘social mobility’, yet it seems that where you live will be determined more now by where your parents lived. The recent history of property in Britain is wrapped up in notions of freedom and the social mobility of owner-occupation and right-to-buy. Yet right now, Britain faces a return to a more traditional relationship with the land, in which property is the principal agent for holding back opportunity-for-all. The property ladder was a one-off opportunity for a lucky generation-and-a-half. Now we are back to a kind of neo-feudalism, in which your quality of life depends on who your parents are, and what they owned. 6 Three Funerals, Two Banking Systems and a Wedding Dramatis personae Bob Diamond, Barclays, various (1996–2012), chief executive (2010–12) Cristiano Ronaldo, Portuguese footballer Alistair Darling, UK chancellor of the exchequer (2007–10) John Varley, Barclays chief executive (2004–11) Eric Daniels, Lloyds chief executive (2003–11) Peter Sands, Standard Chartered chief executive (2006–) Fred Goodwin, Royal Bank of Scotland chief executive (2001–08) Monty Slater, prospective RBS customer, Stockport James Crosby, HBoS chief executive (2001–06); non-executive, then deputy chairman of the FSA (2004–09) Andy Hornby, HBoS chief executive (2006–08) Christine Lagarde, French finance minister (2007–11) Beth Jacobson, former loan officer, Wells Fargo Sheila Dixon, mayor of Baltimore Brad Setser, economist, subsequently US Treasury Joe Cassano, AIG Financial Products, Mayfair, London Lord Turner, chairman of the FSA (2008–13) Lord Myners, Treasury minister Mervyn King, governor of the Bank of England (2003–13) Shriti Vadera, adviser to Gordon Brown, Business Department minister Hector Sants, FSA chief executive (2007–12) Marcus Agius, chairman of Barclays (2007–12) On 13 May 2007 Bob Diamond had only one aim: to give a wide berth to Cristiano Ronaldo.

Lastly, if – as some bond traders believe – the 1.3 million Britons with an interest-only mortgage and an inadequate repayment vehicle are enduring ‘glorified renting’, then you can take the home ownership figure down to around 50 per cent, or where we were in 1971 – or roughly German levels. In other words, the Thatcher ‘property-owning democracy’ was really only a property-owning generation given a one-off gift of their council houses. It undoubtedly felt very real to those who benefited, but it is not proving to be a genuinely transformational and enduring force. At the very least, very high house prices are undoing the political promise of the property-owning democracy. Arguably, though, the property-owning democracy is a myth. The underside of the boom in property prices is beginning to be seen not just in the broken, or perhaps missing, lower rungs of the housing ladder, but also in the state of the finances of those who took out mortgages at the top of the boom.


pages: 288 words: 16,556

Finance and the Good Society by Robert J. Shiller

Alvin Roth, bank run, banking crisis, barriers to entry, Bernie Madoff, buy and hold, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, cognitive dissonance, collateralized debt obligation, collective bargaining, computer age, corporate governance, Daniel Kahneman / Amos Tversky, Deng Xiaoping, diversification, diversified portfolio, Donald Trump, Edward Glaeser, eurozone crisis, experimental economics, financial innovation, financial thriller, fixed income, full employment, fundamental attribution error, George Akerlof, income inequality, information asymmetry, invisible hand, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, land reform, loss aversion, Louis Bachelier, Mahatma Gandhi, Mark Zuckerberg, market bubble, market design, means of production, microcredit, moral hazard, mortgage debt, Myron Scholes, Nelson Mandela, Occupy movement, passive investing, Ponzi scheme, prediction markets, profit maximization, quantitative easing, random walk, regulatory arbitrage, Richard Thaler, Right to Buy, road to serfdom, Robert Shiller, Robert Shiller, Ronald Reagan, selection bias, self-driving car, shareholder value, Sharpe ratio, short selling, Simon Kuznets, Skype, Steven Pinker, telemarketer, Thales and the olive presses, Thales of Miletus, The Market for Lemons, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, Vanguard fund, young professional, zero-sum game, Zipcar

One example of a derivatives market is a forward market for a commodity, in which one can sign a contract to buy from another a commodity or a property for future delivery at a speci ed date at a speci ed price. Another example is a futures market for a commodity, which is the same as a forward market except that it occurs on an organized exchange with established standards for quality, margining, and so forth. There are also markets for options: with an option one can purchase the right to buy something, say a stock or a bond, at a speci ed future date for a speci ed future price. Yet another example is a swap market: in a swap, such as a foreign exchange swap, two parties agree to exchange nancial instruments (in this example two currencies) at a speci ed time in the future at a prespeci ed exchange rate. There is a derivative price in each of these markets: the price of the forward, future, option, or swap.

Instead we have a large home-owning population in the United States and other more developed countries. This did not happen by accident. The concept of a “property-owning democracy” was developed by Conservative British member of Parliament Noel Skelton in the 1920s and 1930s. His cause was taken up by Prime Minister Harold Macmillan in the 1950s, with a home building program, and Prime Minister Margaret Thatcher in the 1970s, with a program to sell council houses (public housing managed by local councils) to their renter inhabitants. In the United States major policies to promote homeownership came in the 1930s with President Franklin D. Roosevelt’s New Deal. The Federal Housing Administration was created in 1934 to provide for government insurance of new mortgages, and the Federal National Mortgage Association (later called Fannie Mae) was created in 1938 to buy mortgages from their originators to support the housing market.


pages: 272 words: 19,172

Hedge Fund Market Wizards by Jack D. Schwager

asset-backed security, backtesting, banking crisis, barriers to entry, beat the dealer, Bernie Madoff, Black-Scholes formula, British Empire, business cycle, buy and hold, Claude Shannon: information theory, cloud computing, collateralized debt obligation, commodity trading advisor, computerized trading, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, delta neutral, diversification, diversified portfolio, Edward Thorp, family office, financial independence, fixed income, Flash crash, hindsight bias, implied volatility, index fund, intangible asset, James Dyson, Jones Act, Long Term Capital Management, margin call, market bubble, market fundamentalism, merger arbitrage, money market fund, oil shock, pattern recognition, pets.com, Ponzi scheme, private sector deleveraging, quantitative easing, quantitative trading / quantitative finance, Right to Buy, risk tolerance, risk-adjusted returns, risk/return, riskless arbitrage, Rubik’s Cube, Sharpe ratio, short selling, statistical arbitrage, Steve Jobs, systematic trading, technology bubble, transaction costs, value at risk, yield curve

The purchase of a call option provides the buyer with the right—but not the obligation—to purchase the underlying item at a specified price, called the strike or exercise price, at any time up to and including the expiration date. A put option provides the buyer with the right—but not the obligation—to sell the underlying item at the strike price at any time prior to expiration. (Note, therefore, that buying a put is a bearish trade, while selling a put is a bullish trade.) The price of an option is called a premium. As an example of an option, an IBM April 130 call gives the purchaser the right to buy 100 shares of IBM at $130 per share at any time during the life of the option. The buyer of a call seeks to profit from an anticipated price rise by locking in a specified purchase price. The call buyer’s maximum possible loss will be equal to the dollar amount of the premium paid for the option. This maximum loss would occur on an option held until expiration if the strike price was above the prevailing market price.

His directness made this an unexpectedly compelling interview for me. Clark began our conversation by telling his story from the time he finished school at the age of 17. I did my A levels a year early, and left school at the age of 17. I knew nothing about university. No one in my family had been to university. You came from a working-class background? I was the third generation, all living in the same council house—government housing is what I guess you would call in the U.S.—on the outskirts of London. I didn’t know my father; he didn’t hang around. I lived with my mother, brother, and grandparents. My mother was always working, so I was sort of half-raised by my grandparents. One day, I got a call from Grant, a school friend who now works here—a call for which I am eternally grateful. He was considered one of the posh kids at school because his parents actually owned their own house.


pages: 263 words: 80,594

Stolen: How to Save the World From Financialisation by Grace Blakeley

"Robert Solow", activist fund / activist shareholder / activist investor, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Basel III, basic income, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, bitcoin, Bretton Woods, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collective bargaining, corporate governance, corporate raider, credit crunch, Credit Default Swap, cryptocurrency, currency peg, David Graeber, debt deflation, decarbonisation, Donald Trump, eurozone crisis, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, fixed income, full employment, G4S, gender pay gap, gig economy, Gini coefficient, global reserve currency, global supply chain, housing crisis, Hyman Minsky, income inequality, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), Kenneth Rogoff, Kickstarter, land value tax, light touch regulation, low skilled workers, market clearing, means of production, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, neoliberal agenda, new economy, Northern Rock, offshore financial centre, paradox of thrift, payday loans, pensions crisis, Ponzi scheme, price mechanism, principal–agent problem, profit motive, quantitative easing, race to the bottom, regulatory arbitrage, reserve currency, Right to Buy, rising living standards, risk-adjusted returns, road to serfdom, savings glut, secular stagnation, shareholder value, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, the built environment, The Great Moderation, too big to fail, transfer pricing, universal basic income, Winter of Discontent, working-age population, yield curve, zero-sum game

Property wealth is the second most significant source of wealth in the UK after private pensions wealth, worth £4.6bn.35 Prices in London have risen faster than those in other parts of the country, and now property wealth represents almost 50% of the net wealth of people living in London, compared to 26% for those living in the North East. This increase in house prices began during the 1980s, as part of Thatcher’s push to create a “property-owning democracy”.36 Right-to-Buy legislation, which allowed tenants of social housing to purchase their home at between one- and two-thirds of its market value, was passed in 1980. In 1984, the amount of time a tenant had been living in a flat before they were able to benefit from Right-to-Buy was reduced, and the potential discounts on the property’s value were increased. In the first seven years of the 1980s, 6% of Britain’s social housing stock was sold to private owner-occupiers. But the privatisation of Britain’s social housing stock would not have been enough to create Thatcher’s nation of home owners.

If everyone wants to buy housing, and is able to access a mortgage, but the housing stock remains fixed, then the price of housing will rise. From the end of the 1990s recession, the amount of money created and directed into housing increased at a far faster rate than the number of houses for sale, increasing prices. In place of rising wages, Thatcher may as well have said “let them eat houses”. Financial deregulation and right-to buy, combined with the pension fund capitalism released by the Big Bang, allowed the Conservatives to transform the British middle earners into mini-capitalists who would benefit from the financialisation of the economy. By providing capital gains to a large swathe of the population, the Conservatives would be creating a class of people who had a material interest in the economy remaining as it was, even if most of the gains from growth were going to the top 1%.

By taxing the revenues of the big banks, and the salaries of their employees, the British state would be able to provide public services and welfare for those in parts of the country where traditional industries had been destroyed. Globalisation may have harmed British manufacturing, but it could help to provide support for those “left behind” by bolstering the City as a global financial centre. Whilst finance has always played a central role in British politics, in the 1980s and 1990s the City’s dominance was taken to a whole new level. This was initially catalysed by Thatcher’s policies — from bank deregulation, to right-to-buy, to the Big Bang. But Blair and Brown took this process one step further. They developed a complex and arcane regulatory architecture for the City that was easy for insiders to manipulate. These organisations were given a mandate to implement “light touch” regulation on the finance sector, to encourage “innovation” and promote investment.7 Meanwhile, billions of pounds were pumped into the UK’s real estate market, inflating a bubble that would eventually burst in the biggest financial crisis since 1929.


pages: 433 words: 53,078

Be Your Own Financial Adviser: The Comprehensive Guide to Wealth and Financial Planning by Jonquil Lowe

AltaVista, asset allocation, banking crisis, BRICs, buy and hold, correlation coefficient, cross-subsidies, diversification, diversified portfolio, estate planning, fixed income, high net worth, money market fund, mortgage debt, mortgage tax deduction, negative equity, offshore financial centre, Own Your Own Home, passive investing, place-making, Right to Buy, risk/return, short selling, zero-coupon bond

If you do not stand to make a profit from exercising an option, you can simply let it lapse. An option that gives you the right to buy an underlying commodity or investment is called a call option. You can also buy options that give you the right to sell an investment at a set price in future and these are called put options. Taking delivery of the underlying commodity or investments is called exercising the option. But you do not have to hold the option until the exercise date. Instead you can sell it on a derivatives market. The main market is the UK is LIFFE (originally the London International Financial Futures Exchange) which is now part of an international group, NYSE-Euronext. What you are selling is your right to buy or sell, not the underlying assets themselves. Using options for hedging Suppose you own 10,000 shares in a Company X.

If you have a reasonable income and/or savings, you will normally be expected to pay for whatever equipment, adaptations and services you need yourself, though charging practices vary from one local authority to another and Scotland has a different approach to paying for personal care services (see the box). See p. 137 for changes due in England in 2010. If your income and savings are low, your local authority may pay some or all of the cost. You must normally be offered the option of cash (called ‘direct payment’) so that you can choose and buy for yourself the services you need. From 2008–11, a system of ‘personal accounts’ is due to be introduced, under which the cash will be put into an account for you and you will have the choice of spending it yourself on services or getting your local authority to commission the services for you. Increasingly, local authorities no longer provide their own services and you will be buying in help from private firms. Local authorities can supply lists of providers in your area. The cost of personal care services varies from provider to provider.

Often it is not clear whether care is a continuation of NHS treatment and you may have to fight to get care classified this way. If you do not qualify for NHS continuing care, you can still ask for a financial assessment by your local authority to find out if it will help towards paying your care home fees. If you have savings and other capital above a set threshold, you will have to pay the full cost of the fees yourself. These upper capital limits for 2009–10 are shown in Table 5.6. If your capital is less than the upper limit, your local authority may help with the fees but only up to a set maximum which varies from one local authority to another. To find out how much help your local authority will give, your means are assessed broadly as set out below. The rules are complicated and this is just a broad outline: OO Your capital up to the lower limit set out in Table 5.6 is disregarded.


pages: 368 words: 32,950

How the City Really Works: The Definitive Guide to Money and Investing in London's Square Mile by Alexander Davidson

accounting loophole / creative accounting, algorithmic trading, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, Big bang: deregulation of the City of London, buy and hold, capital asset pricing model, central bank independence, corporate governance, Credit Default Swap, dematerialisation, discounted cash flows, diversified portfolio, double entry bookkeeping, Edward Lloyd's coffeehouse, Elliott wave, Exxon Valdez, forensic accounting, global reserve currency, high net worth, index fund, inflation targeting, intangible asset, interest rate derivative, interest rate swap, John Meriwether, London Interbank Offered Rate, Long Term Capital Management, margin call, market fundamentalism, Nick Leeson, North Sea oil, Northern Rock, pension reform, Piper Alpha, price stability, purchasing power parity, Real Time Gross Settlement, reserve currency, Right to Buy, shareholder value, short selling, The Wealth of Nations by Adam Smith, transaction costs, value at risk, yield curve, zero-coupon bond

The bank will have assumed all the risk by itself and so must have confidence in the deal. Issuers are often attracted to a bought deal because it gives instant liquidity. Rights issues If a UK company wants to raise more than 5 per cent of its existing market capitalisation, it must use a rights issue. The company will issue new shares to existing shareholders pro rata to their existing holdings. In a ‘1 for 5’ rights issue, shareholders will have the right to buy one further new share for every five they hold. The process takes perhaps six to eight weeks, twice the length of a conventional share offering. Through a rights issue, shareholders have an opportunity to acquire new shares without paying their stockbroker a commission. They do not have to buy and, if they are to do so, must be convinced that the company will use the cash properly. If the rights issue is to pay off debt, shareholders should assess the chances of success before they subscribe.

In this chapter, we focus on those that are relevant for retail investors, which are options, futures, warrants, contracts for difference and spread betting. Options Options may be over the counter (OTC) or exchange traded (see Chapter 8). If you are a retail investor, a traded option on exchange is accessible. It enables you to bet on the movement of individual shares, or of indices, currencies, commodities or interest rates, or may be used for hedging. Through an option, you have the right to buy or sell a security at a pre-determined price, the exercise price, within a specified period. The option is geared, which means that the underlying share or other asset is under control for the comparatively small upfront cost of the premium, which is the market price of the option. The premium is a small percentage of the option’s size. For every buyer of an option, there is a seller, also known as a writer.

The London Stock Exchange (LSE) introduced them in late 2002 in an early move to obtain a significant presence in derivatives after its failed attempt the previous year to buy the London International Financial Futures Exchange (LIFFE). So far, covered warrants in the FTSE 100 index have proved the most popular in a market that has been slow to take off. The covered warrant is a security and not a contract. As with options, traders in covered warrants pay a small premium, which is the amount they pay for the right to buy or sell the underlying asset, and the warrants are split into calls and puts. As time passes, the covered warrant becomes less valuable, which is reflected in a declining premium. Every covered warrant is normally traded before its maturity date and is covered because the issuer covers its position by simultaneously buying the underlying stock or financial instrument in the market. Covered warrants are expensive compared with some equivalent derivative products and cannot be shorted, but the spread (the difference between the buying and selling price) is often narrow, and the packaging is user-friendly.


pages: 349 words: 134,041

Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives by Satyajit Das

accounting loophole / creative accounting, Albert Einstein, Asian financial crisis, asset-backed security, beat the dealer, Black Swan, Black-Scholes formula, Bretton Woods, BRICs, Brownian motion, business process, buy and hold, buy low sell high, call centre, capital asset pricing model, collateralized debt obligation, commoditize, complexity theory, computerized trading, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, cuban missile crisis, currency peg, disintermediation, diversification, diversified portfolio, Edward Thorp, Eugene Fama: efficient market hypothesis, Everything should be made as simple as possible, financial innovation, fixed income, Haight Ashbury, high net worth, implied volatility, index arbitrage, index card, index fund, interest rate derivative, interest rate swap, Isaac Newton, job satisfaction, John Meriwether, locking in a profit, Long Term Capital Management, mandelbrot fractal, margin call, market bubble, Marshall McLuhan, mass affluent, mega-rich, merger arbitrage, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mutually assured destruction, Myron Scholes, new economy, New Journalism, Nick Leeson, offshore financial centre, oil shock, Parkinson's law, placebo effect, Ponzi scheme, purchasing power parity, quantitative trading / quantitative finance, random walk, regulatory arbitrage, Right to Buy, risk-adjusted returns, risk/return, Satyajit Das, shareholder value, short selling, South Sea Bubble, statistical model, technology bubble, the medium is the message, the new new thing, time value of money, too big to fail, transaction costs, value at risk, Vanguard fund, volatility smile, yield curve, Yogi Berra, zero-coupon bond

Derivatives, with their leverage and off-balance sheet nature, were ideal. This spawned numerous jokes. The best known goes like this: ‘How many workers does it take for Toyota to make a motor car?’ ‘Four. One to design it, one to build it and two to trade the long bond.’5 The most famous form of zaiteku was the ‘Japanese warrants arbitrage’. Japanese companies issued bonds with attached equity warrants; the warrants gave the buyer the right to buy shares in the company, effectively a call option on the shares; the company received the premium for the option as a low interest rate on its borrowing. The Japanese companies competed with each other to get lower interest rates. Dealers competed with each other to give the Japanese companies lower interest rates. The coupon on the bonds reached zero and in some cases the cost of the debt was negative.

DAS_C07.QXP 8/7/06 200 4:45 PM Page 200 Tr a d e r s , G u n s & M o n e y Failing the model test My first real taste of model failure was spectacular. I had had a few blow-ups before but they had been manageable, I had kept my job. Then, I did a six month currency option for $1,000 million. It was for a very good client. The sales desk put lots of pressure on me: I foolishly obliged. It was an Australian dollar (A$) put/US dollar (US$) call with a strike price of A$1:$US0.7210. I was giving the client the right to buy US$1,000,000,000 from me. In return, they would give me A$1,386,962,552. They would only exercise the option if the A$ fell below US$0.7210, say to US$0.70. I traded in the currency markets to hedge the option. This meant that I sold A$/bought $US according to our pricing model. The idea is that you match the delta of the option with the delta of the currency trade. If the A$ was weaker and the option was likely to be exercised, then I sold more A$/buying more $US.

Financial engineering quickly replaced actual engineering in most businesses. Who’s fooling whom? Convertible bonds are a venerable product. A convertible bond gives the holder the right to exchange the bond for shares in the issuer; you give up your entitlement to future interest and return of capital in return for a fixed number of shares. It is a bond combined with an equity option. The equity option gives the holder the right to buy shares in the issuer. In return for giving the investor the share options, the issuer of the convertible bond gets lower interest rates. I have issued convertibles, structured convertibles and traded convertibles. Issuers are generally told that they were selling equity at a premium to the current market price. They get lower cost funding and debt with longer maturity than they would normally.


pages: 253 words: 79,214

The Money Machine: How the City Works by Philip Coggan

activist fund / activist shareholder / activist investor, algorithmic trading, asset-backed security, Bernie Madoff, Big bang: deregulation of the City of London, bonus culture, Bretton Woods, call centre, capital controls, carried interest, central bank independence, collateralized debt obligation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, disintermediation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, endowment effect, financial deregulation, financial independence, floating exchange rates, Hyman Minsky, index fund, intangible asset, interest rate swap, Isaac Newton, joint-stock company, labour market flexibility, large denomination, London Interbank Offered Rate, Long Term Capital Management, merger arbitrage, money market fund, moral hazard, mortgage debt, negative equity, Nick Leeson, Northern Rock, pattern recognition, purchasing power parity, quantitative easing, reserve currency, Right to Buy, Ronald Reagan, shareholder value, South Sea Bubble, sovereign wealth fund, technology bubble, time value of money, too big to fail, tulip mania, Washington Consensus, yield curve, zero-coupon bond

This made them increasingly unpopular in the bull market when it was cheaper to issue ordinary shares to a seemingly insatiable investing public. Options Options differ from other types of equity investment because they are not issued by the companies concerned. Instead, they are instruments traded on stock exchanges designed to give investors greater leverage and to act as hedging vehicles for those investors worried about future share price movements. Options grant the buyer the right to buy (a call option) or to sell (a put option) a set number of shares at a fixed price. The option buyer is not obliged to buy or sell at that price if it is not advantageous to do so. In return for granting the option, the option seller receives a non-returnable premium. An example will help explain the principles involved. Suppose an investor has bought British Telecom (BT) shares at £1.50. Their price moves to £1.70 each.

The investor has two ways of profiting from a convertible issue: through the interest rate and possible capital appreciation of the bond, and through conversion into shares, which permits him or her to earn dividends and a possible further increase in the share price. The borrower will be able to offer a reduced coupon on the original bond issue because of the potential benefits to the investor of conversion. If the investor converts, the company will increase its equity base but will dilute the value of its shares. Another means of achieving a similar effect is to issue a bond with equity warrants attached which grant the investor the right to buy the company’s shares at a set price. The difference between the two methods is that with a straight convertible the borrower gets the benefit of a reduced cost of borrowing because of the lower coupon and with a warrant the borrower receives the benefit in the form of additional cash from the sale of the warrant. One problem with equity convertibles occurs when the share price of the issuing company falls sharply.

By varying the rate it charges banks for lending against gilts, it can affect the level of interest rates charged throughout the economy. Hence, the key UK interest rates which used to be known as the base, or minimum lending, rate is now known as the repo rate. Not all instruments in the money market are tradeable. Local authority loans form one of the oldest sectors of the money markets. Lending money to local authorities is a steady and unspectacular business but the 1980s storms over rate-capping highlighted the fact that local authorities look to the City for funds. THE PLAYERS IN THE MARKETS The bulk of the activity in the markets consists of banks borrowing and lending to and from each other, sometimes with the assistance of a broker. Most of the loans have maturities of three months or less. Much of this trading takes place electronically or via the telephone.


pages: 740 words: 217,139

The Origins of Political Order: From Prehuman Times to the French Revolution by Francis Fukuyama

Admiral Zheng, agricultural Revolution, Andrei Shleifer, Asian financial crisis, Ayatollah Khomeini, barriers to entry, Berlin Wall, blood diamonds, California gold rush, cognitive dissonance, colonial rule, conceptual framework, correlation does not imply causation, currency manipulation / currency intervention, demographic transition, Deng Xiaoping, double entry bookkeeping, endogenous growth, equal pay for equal work, European colonialism, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, Francisco Pizarro, Hernando de Soto, hiring and firing, invention of agriculture, invention of the printing press, Khyber Pass, land reform, land tenure, means of production, offshore financial centre, out of africa, Peace of Westphalia, principal–agent problem, RAND corporation, rent-seeking, Right to Buy, Scramble for Africa, selective serotonin reuptake inhibitor (SSRI), spice trade, Stephen Hawking, Steven Pinker, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, trade route, transaction costs, Washington Consensus, zero-sum game

First and foremost was the centralized source of authority that held an effective monopoly of military power over a defined piece of territory—what we call a state. Peace was kept not by a rough balance of power between groups of kin but by the state’s army and police, now a standing force that could also defend the community against neighboring tribes and states. Property came to be owned not by groups of kinfolk but by individuals, who increasingly won the right to buy and sell it at will. Their rights to that property were enforced not by kin but by courts and legal systems that had the power to settle disputes and compensate wrongs. In time, moreover, social rules were formalized as written laws rather than customs or informal traditions. These formal rules were used to organize the way that power was distributed in the system, regardless of the individuals who exercised power at any given time.

Serfs usually first graduated to the status of renters on the property of their lords, whose usufructuary rights might be limited to their lifetimes or sometimes transmissible to their children. Some rights to land were mainmortable—that is, they passed to their children only if their children lived with them; otherwise they reverted to the landowner. In the eighteenth century, the abolition of mainmort became one of the great causes of liberal reformers. In other cases, peasants graduated to the status of landowners with complete rights to buy, sell, and hand down their land as they saw fit. On the eve of the French Revolution, peasants owned 50 percent of the land in France, more than twice as much as the nobles.3 Tocqueville points out that lords by then had long since ceased to play any real role in governing their peasants, which is why their residual rights to collect a variety of fees or to force the peasants to use their mills or winepresses was so bitterly resented.4 Precisely the opposite happened in Eastern Europe.

Like the American Declaration of Independence, however, the Glorious Revolution did establish the principle of popular consent, leaving it up to succeeding generations to widen the circle of those considered the “people” in a political sense. The significance of the Glorious Revolution is not that it marked the onset of secure property rights in England, as some have argued.34 Strong property rights had been established centuries earlier. Individuals, including women, exercised the right to buy and sell property as far back as the thirteenth century (see chapter 14). The Common Law and the multiplicity of royal, county, and hundred courts allowed nonelite landowners to litigate property disputes outside of the jurisdiction of the local lord. A strong capitalist economy had already emerged by the late seventeenth century, as had a growing middle class who were participants in the struggle against Stuart absolutism.


A United Ireland: Why Unification Is Inevitable and How It Will Come About by Kevin Meagher

Boris Johnson, British Empire, Celtic Tiger, cognitive dissonance, colonial rule, deindustrialization, knowledge economy, kremlinology, land reform, Nelson Mandela, period drama, Right to Buy, trade route, transaction costs

Catholics were not allowed their own schools, or to send their children abroad for their education. They could not marry Protestants and any priest who did so faced death for his trouble. Catholic bishops were banned from the country (on pain of death) and priests needed to be registered (failure to do so saw them branded on the cheek). No Catholic could own a horse with a value of more than five pounds. (Ingeniously, this law allowed a Protestant the right to buy any horse from any Catholic for that amount.) The philosopher Edmund Burke described the system of Penal Laws as ‘a machine of wise and elaborate contrivance, as well fitted for the oppression, impoverishment and degradation of a people, and the debasement in them of human nature itself, as ever proceeded from the perverted ingenuity of man’. It’s fair to say the Tudors left their mark on Ireland.

Andrews, was pleased to respond to a rumour that twenty-eight of the thirtyone porters at Stormont were Roman Catholics. ‘I have investigated the matter, and I find that there are thirty Protestants, and only one Roman Catholic, there temporarily.’ These attitudes permeated every corner of the state. Electoral boundaries were gerrymandered to ensure Unionist hegemony wherever possible. This was significant because Northern Ireland was a patchwork of small local authorities. By the late 1960s, there were some seventy-three local authorities for a population of 1.5 million. Crucially, the franchise for local elections was on the basis of property ownership, not universal suffrage. It was estimated that in 1961 over a quarter of the parliamentary electorate were disfranchised at local elections. Moreover, the retention of a company vote entitled business directors to more than one ballot paper.


pages: 224 words: 69,494

Mobility: A New Urban Design and Transport Planning Philosophy for a Sustainable Future by John Whitelegg

active transport: walking or cycling, Berlin Wall, British Empire, car-free, conceptual framework, congestion charging, corporate social responsibility, decarbonisation, energy transition, eurozone crisis, glass ceiling, Intergovernmental Panel on Climate Change (IPCC), megacity, meta analysis, meta-analysis, New Urbanism, peak oil, post-industrial society, price mechanism, Right to Buy, smart cities, telepresence, the built environment, The Death and Life of Great American Cities, The Spirit Level, transit-oriented development, urban planning, urban sprawl

Another example is limiting quota of new car registration in an attempt to curb unsustainable levels of automobile ownership (Song, 2013). This has since been further tightened by 37.5% to 150,000 per year in 2017. Up until the end of March 2014, Beijing, Shanghai, Guiyang, Guangzhou, Shijiazhuang, Tianjin and Guangzhou had already joined in similar efforts to restrain car ownership. Shanghai has adopted the Singapore-style Certificate of Entitlement for new car purchase, which means bidding at an auction for the right to buy a new car.” In addition to measures to restrict car use there are measures to improve urban public transport: “On the other hand, priority has now been transferred towards developing Urban Public Transport (UPT) at the national strategy level, especially Rapid Mass Transit (RMT) through the Twelfth Five-Year Plan. RMT, which includes Subway/Metro, Bus Rapid Transit (BRT) within cities, as well as inter-city High-Speed Rail (HSR), is now undergoing massive growth (Newman, Kenworthy and Glazebrook, 2013).

EEA (2013) has quantified the proportionate responsibility of transport emissions in the totality of air pollution: “The contribution of transport to air quality ..was responsible for 58% of all NOx emissions…and 27% of PM 2.5 emissions..and the contribution of urban and local traffic to PM10 concentration is 35%, while it is up to 64% in the case of NO2 concentrations.” Air quality policy and practice in the UK is a clear case of policy failure and decisions at all levels not to do anything to improve air quality (Whitelegg, 2013). Local authorities in the UK have a legal duty under the 1995 Environment Act to monitor air quality, declare Air Quality Management Areas (AQMAs) if air quality fails to meet the EU standard and put in place an Air Quality Action Plan (AQAP) to improve air quality. There are approximately 405 AQMAs in the UK and there is no documented case in the UK of the removal of the AQMA designation because the AQAP has improved air quality and solved the problem.

There are approximately 405 AQMAs in the UK and there is no documented case in the UK of the removal of the AQMA designation because the AQAP has improved air quality and solved the problem. There is a stark contrast between the accumulated knowledge on the severe effects of poor air quality on human health (39,450 deaths pa in the UK) and the gross inadequacy of the policy response. The Lancaster City Council Air Quality Strategy (Lancaster City Council 2013) does not contain a single action or intervention that the local authority will initiate or implement that is likely to produce an improvement in air quality. This is a serious public policy and public health failure. The statutory responsibility for improving air quality has been in place for 20 years and there is still no action plan that contains actions and this is in spite of the clear evidence in the strategy that air pollution deaths occupy the 3rd rank after smoking (1) and obesity (2).


pages: 1,845 words: 567,850

J.K. Lasser's Your Income Tax 2014 by J. K. Lasser

Affordable Care Act / Obamacare, airline deregulation, asset allocation, business cycle, collective bargaining, distributed generation, employer provided health coverage, estate planning, Home mortgage interest deduction, intangible asset, medical malpractice, medical residency, mortgage debt, mortgage tax deduction, obamacare, passive income, Ponzi scheme, profit motive, rent control, Right to Buy, telemarketer, transaction costs, urban renewal, zero-coupon bond

The IRS disallowed the deduction and the Tax Court agreed, holding that a donor receives a benefit by merely having the right to attend the event. To claim a deduction for the price of the tickets the couple should have returned them to the charity. Donation for the right to buy athletic stadium tickets If you contribute to a public or nonprofit college or university and receive the right to buy preferential seating at the school’s athletic complexes, you may deduct 80% of the contribution to the school. The 80% deduction also applies where your contribution gives you the right to buy seating in stadium skyboxes, suites, or special viewing areas. The cost of any tickets you buy is not deductible. The deduction is allowed only to the extent that you receive the right to buy tickets rather than the tickets themselves. For example, if in exchange for a substantial donation you receive a season ticket worth $200, your payment is reduced by $200 before applying the 80% deductible percentage.

However, “token” items and certain membership benefits, as described in 14.3, do not have to be described or valued. There is also an exception if the contribution is to a religious organization and the only benefits received are “intangible” religious benefits, such as admission to religious ceremonies; these do not have to be described or valued, but the statement must indicate that they are the sole benefits provided. - - - - - - - - - - Filing Tip Right To Buy Athletic Stadium Tickets The IRS considers 20% of the amount paid for the right to buy college or university athletic seating to be the fair market value of the right. You may deduct 80% (14.3). When your payment is $312.50 or more, you are considered to have made a contribution of at least $250 ($250 = 80% of $312.50), requiring a written acknowledgment from the charity. - - - - - - - - - - Deadline for 2013 donation acknowledgments For a 2013 contribution, the deadline for obtaining an acknowledgment is the date you file your 2013 return, but no later than the April 15, 2014, filing due date or, if you obtain a filing extension, the extended due date.

You received the X stock when it had a market value of $25; you report $25, the value of the property received. The $25 value is also your basis for the stock. Corporate benefit may be treated as constructive dividend On an audit, the IRS may charge that a benefit given to a shareholder-employee should be taxed as a constructive dividend. For example, the Tax Court agreed with the IRS that a corporation’s payment for a license that gave the sole shareholder the right to buy season tickets to Houston Texans football games was a constructive dividend. 4.8 Taxable Stock Dividends The most frequent type of stock dividend is not taxable: the receipt by a common stockholder of a corporation’s own common stock as a dividend (4.6). Taxable stock dividends The following stock dividends are taxable: Stock dividends paid to holders of preferred stock. However, no taxable income is realized where the conversion ratio of convertible preferred stock is increased only to take account of a stock dividend or split involving the stock into which the convertible stock is convertible.


pages: 603 words: 182,826

Owning the Earth: The Transforming History of Land Ownership by Andro Linklater

agricultural Revolution, anti-communist, Anton Chekhov, Ayatollah Khomeini, Big bang: deregulation of the City of London, British Empire, business cycle, colonial rule, Corn Laws, corporate governance, creative destruction, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, facts on the ground, Francis Fukuyama: the end of history, full employment, Gini coefficient, Google Earth, income inequality, invisible hand, James Hargreaves, James Watt: steam engine, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kibera, Kickstarter, land reform, land tenure, light touch regulation, market clearing, means of production, megacity, Mikhail Gorbachev, Mohammed Bouazizi, Monkeys Reject Unequal Pay, mortgage debt, Northern Rock, Peace of Westphalia, Pearl River Delta, plutocrats, Plutocrats, Ponzi scheme, profit motive, quantitative easing, Ralph Waldo Emerson, refrigerator car, Right to Buy, road to serfdom, Robert Shiller, Robert Shiller, Ronald Reagan, spinning jenny, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, trade route, transatlantic slave trade, transcontinental railway, ultimatum game, wage slave, WikiLeaks, wikimedia commons, working poor

But other discontented colonists soon joined Yeamans at his palatial mansion at Goose Creek and added their own complaints. They included settlers annoyed by the dues they were forced to pay on their land, such as the annual quit-rent to the proprietors; devout Anglicans irritated by the policy of religious tolerance that gave equal rights to Jews and Quakers; fur traders infuriated by the proprietors’ insistence that they alone had the right to buy pelts from Native Americans; and slave owners chafing against the proprietors’ refusal to allow raids on the Spaniards who harbored runaway slaves in Florida. There was a pattern to this apparently incoherent range of discontents. And despite the tone of his letter, Locke showed that he understood its cause when he came to write the work for which he is now best known, Two Treatises on Government.

Peck in 1810, he had cleared the way for the owners of real estate to buy and sell their property according to the relatively clear-cut federal laws of contract rather than by the convoluted principles of common law that in England had become burdened with entails, reversions, jointures, indentures, and other legal defenses against the sale of land. Thirteen years later, in the case of Johnson v. M’Intosh, Marshall confirmed what Jefferson had always asserted, that only the United States government had the right to buy the territory of “dependent nations,” meaning Native Americans, within its frontier, and thereby ensured that a seemingly inexhaustible supply of nationalized land would be available for sale with clear title to new Americans. Taken together, Marshall’s two judgments made it simple to treat a parcel of land as capital, meaning both as a reserve of past earnings and a resource to be exploited in the future.

Back in Britain, the government’s fury was stoked further by the way the dubiously acquired property was being sold to investors “merely as means of carrying on gambling speculations by persons who never dream of becoming colonists,” as a government report put it. More officials were sent out specifically to protect Maori interests, and the Colonial Office asserted the Jeffersonian principle that only the government had the right to buy directly from its indigenous owners. But nothing could stop the property engine. The first New Zealand land was quickly sold in London, and in 1842 some thirty-two hundred emigrants, almost half of them children, arrived to farm the presurveyed land at Nelson in the South Island. Following Wakefield’s blueprint, it had been planned that the first thousand lots, each of two hundred acres, would be sold for $7.50 an acre, with half the profits paying for the emigration of more buyers.


pages: 2,045 words: 566,714

J.K. Lasser's Your Income Tax by J K Lasser Institute

Affordable Care Act / Obamacare, airline deregulation, asset allocation, business cycle, collective bargaining, distributed generation, employer provided health coverage, estate planning, Home mortgage interest deduction, intangible asset, medical malpractice, medical residency, money market fund, mortgage debt, mortgage tax deduction, passive income, Ponzi scheme, profit motive, rent control, Right to Buy, telemarketer, transaction costs, urban renewal, zero-coupon bond

The IRS disallowed the deduction and the Tax Court agreed, holding that a donor receives a benefit by merely having the right to attend the event. To claim a deduction for the price of the tickets the couple should have returned them to the charity. Donation for the right to buy athletic stadium tickets. If you contribute to a public or nonprofit college or university and receive the right to buy preferential seating at the school’s athletic complexes, you may deduct 80% of the contribution to the school. The 80% deduction also applies where your contribution gives you the right to buy seating in stadium skyboxes, suites, or special viewing areas. The cost of any tickets you buy is not deductible. The deduction is allowed only to the extent that you receive the right to buy tickets rather than the tickets themselves. For example, if in exchange for a substantial donation you receive a season ticket worth $200, your payment is reduced by $200 before applying the 80% deductible percentage.

However, “token” items and certain membership benefits, as described in 14.3, do not have to be described or valued. There is also an exception if the contribution is to a religious organization and the only benefits received are “intangible” religious benefits, such as admission to religious ceremonies; these do not have to be described or valued, but the statement must indicate that they are the sole benefits provided. - - - - - - - - - - Filing Tip Right To Buy Athletic Stadium Tickets The IRS considers 20% of the amount paid for the right to buy college or university athletic seating to be the fair market value of the right. You may deduct 80% (14.3). When your payment is $312.50 or more, you are considered to have made a contribution of at least $250 ($250 = 80% of $312.50), requiring a written acknowledgment from the charity. - - - - - - - - - - Deadline for 2012 donation acknowledgments.

You received the X stock when it had a market value of $25; you report $25, the value of the property received. The $25 value is also your basis for the stock. Corporate benefit may be treated as constructive dividend. On an audit, the IRS may charge that a benefit given to a shareholder-employee should be taxed as a constructive dividend. For example, the Tax Court agreed with the IRS that a corporation’s payment for a license that gave the sole shareholder the right to buy season tickets to Houston Texans football games was a constructive dividend. 4.8 Taxable Stock Dividends The most frequent type of stock dividend is not taxable: the receipt by a common stockholder of a corporation’s own common stock as a dividend (4.6). Taxable stock dividends. The following stock dividends are taxable: Stock dividends paid to holders of preferred stock. However, no taxable income is realized where the conversion ratio of convertible preferred stock is increased only to take account of a stock dividend or split involving the stock into which the convertible stock is convertible.


J.K. Lasser's Your Income Tax 2016: For Preparing Your 2015 Tax Return by J. K. Lasser Institute

Affordable Care Act / Obamacare, airline deregulation, asset allocation, business cycle, collective bargaining, distributed generation, employer provided health coverage, estate planning, Home mortgage interest deduction, intangible asset, medical malpractice, medical residency, mortgage debt, mortgage tax deduction, passive income, Ponzi scheme, profit motive, rent control, Right to Buy, transaction costs, urban renewal, zero-coupon bond

The IRS disallowed the deduction and the Tax Court agreed, holding that a donor receives a benefit by merely having the right to attend the event. To claim a deduction for the price of the tickets the couple should have returned them to the charity. Donation for the right to buy athletic stadium tickets. If you contribute to a public or nonprofit college or university and receive the right to buy preferential seating at the school’s athletic complexes, you may deduct 80% of the contribution to the school. The 80% deduction also applies where your contribution gives you the right to buy seating in stadium skyboxes, suites, or special viewing areas. The cost of any tickets you buy is not deductible. The deduction is allowed only to the extent that you receive the right to buy tickets rather than the tickets themselves. For example, if in exchange for a substantial donation you receive a season ticket worth $200, your payment is reduced by $200 before applying the 80% deductible percentage.

For a 2015 contribution, the deadline for obtaining an acknowledgment is the date you file your 2015 return, but no later than the filing due date of April 18, 2016 (April 19 for residents of Maine or Massachusetts) or, if you obtain a filing extension, the extended due date.Keep the acknowledgment with your records; it does not have to be attached to your return. Filing Tip Right To Buy Athletic Stadium Tickets The IRS considers 20% of the amount paid for the right to buy college or university athletic seating to be the fair market value of the right. You may deduct 80% (14.3). When your payment is $312.50 or more, you are considered to have made a contribution of at least $250 ($250 = 80% of $312.50), requiring a written acknowledgment from the charity. Payments throughout the year. For purposes of the $250 threshold for an acknowledgment, each contribution made during the year is separately considered.

Writers receive a cash premium from the holder. While there are numerous variations on how stock options can be used as investment strategies, the basic ones include the following. Calls. Buying a call gives the holder the right to buy a specified number of shares of the underlying stock at a given exercise price on or before the option expiration date. Selling a call gives the seller, called the writer, the obligation to sell shares to the holder at the agreed upon price on or before the option expiration date. The holder pays a premium to the writer for the right to buy the shares. If the price of the stock rises above the agreed-upon price (the strike or exercise price), the holder exercises the buy option and acquires the shares. If not, the holder lets the options expire. The holder can sell the call prior to the expiration date.


pages: 269 words: 79,285

Silk Road by Eileen Ormsby

4chan, bitcoin, blockchain, Brian Krebs, corporate governance, cryptocurrency, Edward Snowden, fiat currency, Firefox, Julian Assange, litecoin, Mark Zuckerberg, Network effects, peer-to-peer, Ponzi scheme, profit motive, Right to Buy, Ross Ulbricht, Satoshi Nakamoto, stealth mode startup, Ted Nelson, trade route, Turing test, web application, WikiLeaks

Both the Silk Road forums and Reddit’s Silk Road sub-Reddit held lengthy discussions debating whether there had been more than one owner of Silk Road and, if so, how many and in what timeframe. Many of the theories were plausible; some were fanciful. Dread Pirate Roberts, affectionately known as DPR, became an active and visible member of Silk Road’s large community, where he was hailed as a hero by those who believed it was their right to buy drugs without the interference of law enforcement bodies. More than that, his vision seemed to come from a place of peace, compassion and a genuine desire to provide a safer, better way for otherwise law-abiding citizens to procure and use recreational drugs. ‘For the first time I saw the drug cartels and the dealers, and every person in the whole damn supply chain in a different light,’ he wrote.

‘I am in favor for the ex-cons, the radicals, the communists, anarchist, the oppressed, and those who suffer abuse from the dominant Anglo culture in America to possess all the guns and ammo they can get (including C4 with proper training),’ one forum member claimed. ‘This is with the implicit intent to bring about change in this failed system called America. I am as libertarian as the next guy about most things but the sale of guns will be the downfall of [Silk Road].’ ‘We have something very good going for us here and I would hate to see it fucked up over some idealist beliefs that the right to buy guns online is important enough to risk it all,’ said another. Another online dark web marketplace, Black Market Reloaded (BMR), sold guns and other weapons. BMR did not subscribe to the Silk Road’s philosophy of limiting the type of goods sold – other than child pornography – and many Road members suggested that those looking for guns do their shopping at BMR. While Silk Road grabbed all the media attention, BMR quietly but steadily grew in its shadow, attracting the customers who preferred an open market over an ideology.

The news made headlines in every major media outlet around the world, and the website remained offline. Previously sealed official documents from law enforcement were released to the media. Over the ensuing weeks and months, a more complete picture of how Ross Ulbricht had been arrested emerged as more official documents were made public. It appeared that parallel investigations were being carried out by several agencies, including the FBI, Homeland Security, the DEA and local authorities in New York and Maryland. The State of Maryland had lodged a sealed indictment in May 2013 for ‘John Doe aka Dread Pirate Roberts’ alleging the plot to murder Chronicpain, as well as running an international drug empire. It’s not clear whether at that stage Ulbricht was on their radar. A New York–based agent involved in the investigation had found the January 2011 references to Silk Road by somebody calling himself altoid attempting to promote the site in its beginning.


pages: 255 words: 92,719

All Day Long: A Portrait of Britain at Work by Joanna Biggs

Anton Chekhov, bank run, banking crisis, call centre, Chelsea Manning, credit crunch, David Graeber, Desert Island Discs, Downton Abbey, Erik Brynjolfsson, financial independence, future of work, G4S, glass ceiling, industrial robot, job automation, land reform, low skilled workers, mittelstand, Northern Rock, payday loans, Right to Buy, Second Machine Age, six sigma, Steve Jobs, trickle-down economics, unpaid internship, wages for housework, Wall-E

When the reporter John McPhee visited Colonsay, an island south of Lewis in 1969, he accompanied a crofter on rent day, the one day of the year a crofter met the man who owned the land he worked. The crofter paid his rent, the laird murmured something about the year’s farming and then poured two drams of whisky which they drank together. Now much of the land on the Hebrides is owned communally following the Land Reform Act – brought in four years after the Scottish Parliament was established in 1999 – which gave crofters the right to buy the land they farmed at any time. There’s no longer whisky on rent day, just £35 handed to the land’s trustees. Modern crofters take care of livestock but also of the welfare and future of isolated communities, of the Gaelic language, of the idea that Sundays aren’t work days. Nessmen, or Niesochs, come from Ness, on the Isle of Lewis. Ness is a network of tarmacked roads studded with houses with strips of croft land behind.

In the nineteenth century, healthcare was provided under the Poor Laws but social care was administered locally and subject to charges, a blurry system which was carried through into the structure of the newly created NHS in 1948. Social care continued to be provided as it always had been: in a patchwork and piecemeal manner by charities, local authorities, neighbours and relatives. Throughout the 1950s, the nineteenth-century asylums fell out of fashion and community care became more popular; by the 1980s, local authorities began contracting out carework to private providers. There were attempts by New Labour to integrate health and social care services, and indeed politicians still talk about it: none has yet managed it. Since 2010, social care spending has decreased every year. Councils put block contracts out to tender, and award them most often to companies who can save them the most money.

But I couldn’t leave. No.’ After leaving school at 17, Monte worked a desk job before getting a position at a care home in Gosforth, where she began studying for her NVQ in Health and Social Care. (The demand is high for home care in the north-east, where only 22 per cent of people can pay for their care – the percentage is 55 per cent in the south.) From there she moved to work for one of the last local authority home care schemes before having her first child at 25. Two more children and several other stopgap jobs later, she went back to care in 2009, when Northumberland County Council now used private providers. Monte worked first for Careline, for minimum wage with no mileage; then for Helen McArdle Care, where she was on £6.60 an hour and 25p a mile, and quit when she saw a payslip come to £652 for a month’s work; she took a job instead that paid the minimum wage and paid 15p a mile because it was in a smaller area and she could earn more.


The Handbook of Personal Wealth Management by Reuvid, Jonathan.

asset allocation, banking crisis, BRICs, business cycle, buy and hold, collapse of Lehman Brothers, correlation coefficient, credit crunch, cross-subsidies, diversification, diversified portfolio, estate planning, financial deregulation, fixed income, high net worth, income per capita, index fund, interest rate swap, laissez-faire capitalism, land tenure, market bubble, merger arbitrage, negative equity, new economy, Northern Rock, pattern recognition, Ponzi scheme, prediction markets, Right to Buy, risk tolerance, risk-adjusted returns, risk/return, short selling, side project, sovereign wealth fund, statistical arbitrage, systematic trading, transaction costs, yield curve

Approximately 75–80 per cent of the amount invested will be invested in Payoff profile Megabank 170% FTSE 100 note at maturity Amount payable per share 400 350 300 250 200 150 100 50 0 -100% -75% -50% -25% 0% 25% 50% 75% Percentage change in the FTSE 100 index Super Tracker Figure 1.4.1 Index Payoff profile Megabank 170% FTSE 100 note 100% 125% 150% ឣ 38 PORTFOLIO INVESTMENT _________________________________________________ Call options provide growth related to the underlying index 100 1% Charges 19% Call options 80% Fixed-interest bond Plus growth Plus interest Fixed-interest bond provides 100% return providing the issuer has not defaulted Launch Figure 1.4.2 Maturity Elements of Megabank capital-protected FTSE 100 note the fixed-interest bond, and its credit worthiness is vital to the security of the product. The second element is the derivative strategy, in this case a simple five-year call option on the FTSE 100 index. This gives the owner the right to buy the FTSE 100 index in five years’ time at today’s (strike) price. In our example the amount allocated for options can buy 1.70 call options – that gives the 170 per cent participation rate. If the index is lower than the strike price at maturity, then the call options expire worthless. The final element is costs. In constructing the Megabank capital-protected FTSE 100 note, the issuer (Megabank) has to balance the need to make the participation rate (170 per cent) as high as possible, which will help sales of the note, against how much it is taking in charges.

If you are not a legally married couple or in a civil partnership but nevertheless wish to ‘re-use’ the Nil Rate Band twice then only way to do so is using a Nil Rate Band discretionary trust. There are also specific circumstances when there is a positive advantage in continuing to use the Nil Rate Band discretionary trust where otherwise you might well Rely on the transferable Nil Rate band. These may include but are not limited to: ɀ The desire to avoid assets being available to the local authority in the event of the survivor going into care. By leaving assets to a trust on the first death those assets cannot be taken into account by the local authority for these purposes. Also, where a house is involved divided ownership between a trust and a surviving spouse will reduce the value of that asset for inheritance tax purposes. ɀ The spouse or civil partner may be in a second marriage/civil partnership and may wish to benefit children from an earlier relationship on the first death.


pages: 387 words: 120,155

Inside the Nudge Unit: How Small Changes Can Make a Big Difference by David Halpern

Affordable Care Act / Obamacare, availability heuristic, carbon footprint, Cass Sunstein, centre right, choice architecture, cognitive dissonance, collaborative consumption, correlation does not imply causation, Daniel Kahneman / Amos Tversky, different worldview, endowment effect, happiness index / gross national happiness, hedonic treadmill, hindsight bias, IKEA effect, illegal immigration, job satisfaction, Kickstarter, libertarian paternalism, light touch regulation, longitudinal study, market design, meta analysis, meta-analysis, Milgram experiment, nudge unit, peer-to-peer lending, pension reform, presumed consent, QR code, quantitative easing, randomized controlled trial, Richard Thaler, Right to Buy, Ronald Reagan, Rory Sutherland, Simon Kuznets, skunkworks, the built environment, theory of mind, traffic fines, twin studies, World Values Survey

(In 2014, with the help of Oliver Letwin, we did finally get a prompt on to the envelopes at least – it led to an immediate and sharp increase in visits to the energy regulator’s website about how consumers could switch to better deals.) We lost similar battles with the energy department over the structure of their Green Deal finance scheme; with the Department for Communities over changes to right to buy in social housing (though this finally fell into place in early 2015); with the Department of Health over simplifications around organ donation; and the HMRC and welfare departments over reducing fraud and error in benefits. Sometimes battles are lost because Ministers take a political judgement that they do not want to pursue an idea. This may be because they don’t think it fits with their own political or ethical beliefs, or because they are uneasy about how the public or media might react.

The Early Intervention Foundation (EIF), created in around 2012, is working through the cost-effectiveness of early interventions to address a range of social problems. At the same time as they are collating the evidence, they are working with a range of local authorities across the UK to systematically try out new and old approaches, and seeking to plug the gaps in what we still don’t know. Though still young, the EIF reviews have already caused a stir. For example, their systematic review of domestic violence interventions offended some when it showed that one of the most popular interventions, focusing on gender relations, did not work. Similarly, an early finding of their work that many local authorities were using interventions in populations and in ways that were known to be ineffective risked causing offence, but also has helped to encourage shifts in spending to more effective interventions.

The ONS measurement programme From April 2011, the UK’s Office for National Statistics started asking more than 100,000 Britons a year the following questions on its integrated household panel survey: How satisfied are you with your life nowadays? How happy did you feel yesterday? How anxious did you feel yesterday? To what extent do you feel the things you do in your life are worthwhile? Responses are coded on a scale of 0–10. The samples are constructed to produce representative samples within each local authority area each year, and nationally representative samples on a quarterly basis. The final conclusion was that four questions – or experimental measures – were included in the national survey (see box), while a wider range of more detailed questions was included in smaller sample supplementary surveys. To minimise bias from previous questions – for example, people tend to report lower well-being if they have previously been asked a series of questions about politics – the well-being questions were put early on in the survey, just after the factual questions about age and other demographics.


pages: 423 words: 92,798

No Shortcuts: Organizing for Power in the New Gilded Age by Jane F. McAlevey

affirmative action, Affordable Care Act / Obamacare, Albert Einstein, anti-communist, call centre, clean water, collective bargaining, feminist movement, hiring and firing, immigration reform, informal economy, Mark Zuckerberg, mass incarceration, Naomi Klein, new economy, Occupy movement, precariat, Right to Buy, Ronald Reagan, Silicon Valley, Silicon Valley startup, single-payer health, The Chicago School, union organizing, Upton Sinclair, women in the workforce

From the 1970s through the 1990s, they gutted the power of U.S. factory workers, the biggest organized labor force of that time, by putting them in direct competition with workers earning $1 a day in countries where rights are minimal and repression high. Then they started a drumbeat about unionized workers in the United States being overpaid, and rallied national opinion to that message. This is but one example of how people, in this case the corporate class, can change what academics call the opportunity structure to suit their long-term goals. Global and regional trade accords also give multinational corporations the right to buy land anywhere in almost any country, and new corporate landlords have forcibly evicted or cheaply bought off millions of people from self-sustaining plots of land, directly contributing to a huge rise in immigration into the United States and Europe.8 During the same decades, the corporate class pocketed the courts, one judicial appointment at a time. The resulting deeply conservative judiciary has relentlessly chipped away at the major laws sustaining the victories of labor and civil rights, overturning hard-fought, key provisions of affirmative action and voting-rights protections.

The first breakthrough had been made in California, over an eleven-year period, 1987 to 1999. In 1992, after a five-year campaign to do it, the union passed a statewide law that gave local authorities at the county and municipal levels the right to form legal entities creating an employer of record, with which thousands of homecare employees could then negotiate over the terms and conditions of their work. This changed their employment status from that of independent contractors working for an individual to that of employees working for the local authorities who actually paid their salaries.12 As a result, between 1994 and 1997, 17,000 homecare workers had unionized in northern California as employees of three separate local authorities—Alameda, San Francisco, and Contra Costa counties, in that order.13 Then, in 1999, SEIU succeeded in the largest single homecare victory: the unionization of 74,000 homecare workers in Los Angeles County.


pages: 359 words: 110,488

Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou

Affordable Care Act / Obamacare, bioinformatics, corporate governance, Donald Trump, El Camino Real, Elon Musk, Google Chrome, John Markoff, Jony Ive, Kickstarter, Marc Andreessen, Mark Zuckerberg, Mars Rover, medical malpractice, Menlo Park, obamacare, Ponzi scheme, ride hailing / ride sharing, Right to Buy, Sand Hill Road, side project, Silicon Valley, Silicon Valley startup, stealth mode startup, Steve Jobs, supply-chain management, Travis Kalanick, ubercab

Avie didn’t think that was a good idea but told Don to have the board vote the motion without him since he was resigning. “One more thing, Avie,” Don said. “I need you to waive your own rights to buy the shares.” Avie was starting to get ticked off. He was being asked to put up with a lot. He told Don to have Michael Esquivel, Theranos’s general counsel, send over the requisite documents. He would review them but made no promises. When the documents arrived, Avie read them carefully and concluded that, once the company itself waived its rights to repurchase Shaunak’s shares, it was entirely within his and other shareholders’ rights to buy some of them. He also noticed that Elizabeth had negotiated a sweetheart deal: Shaunak was willing to part with his 1.13 million shares for $565,000. That translated to 50 cents a share, an 82 percent discount to what he and other investors had paid more than a year earlier in Theranos’s last funding round.

The company was being kept afloat with a loan Sunny had personally guaranteed. Meanwhile, Sunny was also traveling to Thailand to set up another swine flu testing outpost. The epidemic had spread to Asia, and the country was one of the region’s hardest hit with tens of thousands of cases and more than two hundred deaths. But unlike in Mexico, it wasn’t clear that Theranos’s activities in Thailand were sanctioned by local authorities. Rumors were circulating among employees that Sunny’s connections there were shady and that he was paying bribes to obtain blood samples from infected patients. When a colleague of Chelsea’s in the client solutions group named Stefan Hristu quit immediately upon returning from a trip to Thailand with Sunny in January 2010, many took it to mean the rumors were true. Chelsea was back from Mexico by then and the Thailand gossip spooked her.


Unfinished Empire: The Global Expansion of Britain by John Darwin

Alfred Russel Wallace, British Empire, colonial rule, Corn Laws, David Ricardo: comparative advantage, European colonialism, financial independence, friendly fire, full employment, imperial preference, Khartoum Gordon, Khyber Pass, Kowloon Walled City, land tenure, mass immigration, Nelson Mandela, open economy, plutocrats, Plutocrats, principal–agent problem, quantitative easing, reserve currency, Right to Buy, Scientific racism, South China Sea, special economic zone, spice trade, The Wealth of Nations by Adam Smith, too big to fail, trade route, transcontinental railway, union organizing

The rapid growth of many port towns (by 1850 the combined population of Quebec City and Montreal had reached 100,000) encouraged this trend. It was even more marked in Australia where the high cost of inland transport, the low labour requirement of the rural interior, and the need to process and pack the bulk export of wool meant that the colonies’ capital cities grew out of all proportion to their thinly settled hinterlands.36 For those migrants who pressed on, what mattered most was access to the land: the right to buy a farm on easy terms. Here they might hope to scratch their subsistence until little by little they built up a surplus to be sold for cash. Indeed, land was the question in all the settlement colonies: all politics was land politics in one form or another. This was hardly surprising since land was the most valuable asset in the colony, the source of its revenues and the fastest means to make a private fortune.

London now looked to its tropical colonies for the means of survival. They would supply the basket of goods craved by the home population – on still shorter rations than during the war (now bread and potatoes were rationed): cocoa for chocolate, tea, coffee and margarine from ground nuts (butter was a luxury). Better still, they could be paid in ‘soft’ pounds, at prices below the world market level, and in deferred funds. In other words, their right to buy British goods with the pounds that they earned could be put off till later by a form of compulsory saving. This allowed British exports to be sent to those markets where they could earn precious dollars. Colonial commodities promised a further reward. Cocoa exports also earned dollars. Even more valuable were strategic materials such as rubber and tin from Malaya and copper from Northern Rhodesia (today’s Zambia) for which America’s industrial expansion and its postwar rearmament created an insatiable demand.

‘At 6 possession was taken of this country in His Majesty’s name and under his colours; fired several volleys of small arms on the occasion, and cheered three times, which was answered from the ship.’3 Apart from Cook and his party, there was no one to witness this historic occasion (except perhaps for some unseen ‘Indians’ – Cook’s word for aborigines – whose ‘smoaks’ had been seen earlier that day), and no one to contest Cook’s claim ‘to the whole Eastern Coast … by the name of New South Wales, together with all the Bays, Harbours and Rivers situate upon the said coast …’4 Confident that no other European power had discovered this side of Australia, and equally confident (with momentous consequences) that there were no chiefs or kings whose local authority he might have to respect, Cook sailed blithely away. Eastern Australia (all unknowing) was now a British possession. Still more picturesque was the ritual the British conducted when they annexed the Kowloon peninsula, across the harbour from their island colony of Hong Kong, in 1860. The British governor, Harry Parkes, handed the Chinese officials a piece of earth wrapped in paper. They handed it back as a symbol of transfer.


pages: 304 words: 22,886

Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler, Cass R. Sunstein

Al Roth, Albert Einstein, asset allocation, availability heuristic, call centre, Cass Sunstein, choice architecture, continuous integration, Daniel Kahneman / Amos Tversky, desegregation, diversification, diversified portfolio, endowment effect, equity premium, feminist movement, fixed income, framing effect, full employment, George Akerlof, index fund, invisible hand, late fees, libertarian paternalism, loss aversion, Mahatma Gandhi, Mason jar, medical malpractice, medical residency, mental accounting, meta analysis, meta-analysis, Milgram experiment, money market fund, pension reform, presumed consent, price discrimination, profit maximization, rent-seeking, Richard Thaler, Right to Buy, risk tolerance, Robert Shiller, Robert Shiller, Saturday Night Live, school choice, school vouchers, transaction costs, Vanguard fund, Zipcar

For those who are especially skeptical of malpractice lawsuits, we have an even more ambitious proposal: patients should be presumed to be permitted to sue only for intentional or reckless wrongdoing—and not for mere negligence. (Negligence is normally defined as the failure to meet what is called the “ordinary standard of care,” a vague concept that tends to make lawyers fight and judges scratch their heads. Intentional or reckless wrongdoing is a harder standard for plaintiffs to meet.) Under this approach, patients would be offered a right to “buy” a stronger liability right, but it would cost them a bit. This approach would undoubtedly mean that waivers would be common. The offer to “buy” should be accompanied by relevant information, so that people know what they are effectively losing if they fail to accept that offer. The general point is that if fully informed, some people would purchase a kind of insurance, in the form of a right to sue, but many others would prefer to take their chances.

By April 16 no fewer than three thousand windshields in the Seattle area were reported to have been “pitted,” and Seattle’s mayor promptly wrote the governor and President Eisenhower: “What appeared to be a localized outbreak of vandalism in damaged auto windshields and windows in the northern part of Washington State has now spread throughout the Puget Sound area…. Urge appropriate federal (and state) agencies be instructed to cooperate with local authorities on emergency basis.” In response, the governor created a committee of scientists to investigate this ominous and startling phenomenon. Their conclusion? The damage, such as it was, was probably “the result of normal driving conditions in which small objects strike the windshields of cars.” A later investigation, supporting the scientists’ conclusion, found that brand new cars lacked pits.

When walking through an American airport any time since 2002, one is bound to hear the following announcement: “The Department of Homeland Security has raised the National Threat Advisory to Orange.” Aside from putting our toiletries into a one-quart zip-lock bag, exactly what actions are we expected to take as a result of this warning? A look at the Homeland Security Web site provides the answer. We are told: “All Americans should continue to be vigilant, take notice of their surroundings, and report suspicious items or activities to local authorities immediately.” Weren’t we supposed to be doing this at level Yellow? It is a safe bet that these announcements are useless. (Much more useful would be a supply of one-quart zip-lock bags for absentminded travelers; and many airports do in fact provide these.) • Feedback can be improved in many activities. Consider the simple task of painting a ceiling. This task is more difficult than it might seem because ceilings are nearly always painted white, and it can be hard to see exactly where you have painted.


pages: 363 words: 98,024

Keeping at It: The Quest for Sound Money and Good Government by Paul Volcker, Christine Harper

anti-communist, Ayatollah Khomeini, banking crisis, Bretton Woods, business cycle, central bank independence, corporate governance, Credit Default Swap, Donald Trump, fiat currency, financial innovation, fixed income, floating exchange rates, forensic accounting, full employment, global reserve currency, income per capita, inflation targeting, liquidationism / Banker’s doctrine / the Treasury view, margin call, money market fund, Nixon shock, Paul Samuelson, price stability, quantitative easing, reserve currency, Right to Buy, risk-adjusted returns, Ronald Reagan, Rosa Parks, secular stagnation, Sharpe ratio, Silicon Valley, special drawing rights, too big to fail, traveling salesman, urban planning

The government’s backbone in demanding the sale of Chrysler’s executive planes over the persistent complaints of the new chairman, Lee Iacocca, helped resonate with the public.* A well-designed “K-car” was just coming into production and Chrysler became competitive. All of the creditors, including the US Treasury, ultimately could make millions: the new loans extended in the crisis included warrants for new stock. Those warrants (contracts that give the owner the right to buy stock at a set price over a certain time period) surged in value as the company recovered. Iacocca, a flamboyant master salesman, pleaded with the new Reagan administration to cancel the warrants, arguing that they were essentially an unearned and undue reward. He didn’t win. Chrysler ended up paying more than $300 million to buy back and cancel warrants held by the Treasury. My wife sent me a little typewritten note, enclosing an ad for Don Diego cigars featuring a handsome Lee Iacocca, cigar in hand.

Bespectacled, pipe-smoking, and six feet, four inches tall, my father cut an imposing and authoritative figure. On the wall behind his office desk he posted a framed quotation from George Washington to put favor seekers on notice: “Do not suffer your good nature, when application is made, to say ‘yes’ when you ought to say ‘no.’ Remember that it is a public not a private cause that is to be injured or benefited by your choice.” To the best of my knowledge, his local authority was seriously challenged only once. I was way too young at the time to understand the implications, but I did know it was highly unusual for him to come home early from a town council meeting, bringing along two or three of his close associates. Later I learned the full story. Determined to professionalize the police and fire departments, my father told the council he would be hiring a new police chief from out of town.

Earlier in this memoir, I described my disappointment with the response to the substantial recommendations of the two national commissions on the public service that I chaired. In those days we thought a quiet crisis was building. The crisis we see around us can no longer be characterized as quiet. Is it impossible that amid all the sound and fury in our national politics today—the erosion of trust in government, the clear need for collaboration among federal, state, and local authorities, the challenge of technology—a revival of interest in effective public management might find a response? A Longer Perspective Unavoidably, I end this memoir with a sense of deep concern. The rising tide of progress toward open democratic societies—the world in which I have lived and served—seems to be ebbing away. Parts of Europe are becoming responsive to authoritarian leadership.


The Global Money Markets by Frank J. Fabozzi, Steven V. Mann, Moorad Choudhry

asset allocation, asset-backed security, bank run, Bretton Woods, buy and hold, collateralized debt obligation, credit crunch, discounted cash flows, discrete time, disintermediation, fixed income, high net worth, intangible asset, interest rate derivative, interest rate swap, large denomination, locking in a profit, London Interbank Offered Rate, Long Term Capital Management, margin call, market fundamentalism, money market fund, moral hazard, mortgage debt, paper trading, Right to Buy, short selling, stocks for the long run, time value of money, value at risk, Y2K, yield curve, zero-coupon bond, zero-sum game

These notes have a cap rate of 10% and a floor rate of 3%. Of course, with these non-traditional (i.e., non-interest rate reference rates) floaters expose portfolios to different types of risks. Moreover, some of them are not simple to value—an undesirable feature for a cash portfolio. Floating-Rate Securities 105 Call and Prepayment Provisions Just like fixed-rate issues, a floater may be callable. The call option gives the issuer the right to buy back the issue prior to the stated maturity date. The call option may have value to the issuer some time in the future for two reasons. First, market interest rates may fall so that the issuer can exercise the option to retire the floater and replace it with a fixed-rate issue. Second, the required margin decreases so that the issuer can call the issue and replace it with a floater with a lower quoted margin.3 The issuer’s call option is a disadvantage to the investor since the proceeds received must be reinvested either at a lower interest rate or a lower margin.

EXHIBIT 1.1 US Money Market Volumes, $ Billion at Year-End Instrument 1990 1995 1999 Treasury bills Federal agency securities Commercial paper Bankers’ acceptances Fed funds borrowers and repo Eurodollar borrowings CDs (min size $100,000) 527 435 561 55 409 37 432 748 845 675 29 569 94 345 723 1,284 1,213 21 762 167 634 Source: Federal Reserve Bulletin, 2000, 2001 4 THE GLOBAL MONEY MARKETS EXHIBIT 1.2 Composition of Sterling Money Markets, £ Billion Volume Outstanding * Includes Treasury bills, sell/buy-backs and local authority bills Source: Bank of England Quarterly Bulletin, Autumn 2001 Chapters 3 and 4 cover short-term debt instruments issued by some of the largest borrowers in the world—the U.S. Treasury and U.S. federal agencies. U.S. Treasury bills are considered among the safest and most liquid securities in the money market. Treasury bill yields serve as benchmark short-term interest rates for markets around the world.

Over time the impact of the Basel rules has led to the modified rules now proposed as Basel II, the final form of which is expected to come into force in 2005. EXHIBIT 14.1 Weighting Risk Weightings of Typical Banking Book Assets, Basel I Asset Type Remarks 0% • Cash • Claims on own sovereign and Zone A sovereigns and central banks • Claims on Zone B sovereign issuers denominated in that country’s domestic currency 20% • Claims on multilateral development banks • Claims on regional governments or local authorities in own or Zone A countries • Senior claims on own country or guaranteed by Zone A banking institutions • Senior claims on Zone B banking institutions with an original maturity of under one year • Claims secured on residential property • Mortgage-backed securities • All other claims Zone A countries are members of the OECD and countries that have concluded special lending arrangements with the IMF.


pages: 1,042 words: 266,547

Security Analysis by Benjamin Graham, David Dodd

activist fund / activist shareholder / activist investor, asset-backed security, backtesting, barriers to entry, business cycle, buy and hold, capital asset pricing model, carried interest, collateralized debt obligation, collective bargaining, corporate governance, corporate raider, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, diversified portfolio, fear of failure, financial innovation, fixed income, full employment, index fund, intangible asset, invisible hand, Joseph Schumpeter, locking in a profit, Long Term Capital Management, low cost airline, low cost carrier, moral hazard, mortgage debt, Myron Scholes, Right to Buy, risk-adjusted returns, risk/return, secular stagnation, shareholder value, The Chicago School, the market place, the scientific method, The Wealth of Nations by Adam Smith, transaction costs, zero-coupon bond

It should be borne in mind that the effect of these provisions is to preserve only the principal or par value of the privileged issue against dilution. If a convertible is selling considerably above par, the premium will still be subject to impairment through additional stock issues or a special dividend. A simple illustration will make this clear. A bond is convertible into stock, par for par. The usual antidilution clauses are present. Both bond and stock are selling at 200. Stockholders are given the right to buy new stock, share for share, at par ($100). These rights will be worth $50 per share, and the new stock (or the old stock “ex-rights”) will be worth 150. No change will be made in the conversion basis, because the new stock is not issued below the old conversion price. However, the effect of offering these rights must be to compel immediate conversion of the bonds, since otherwise they would lose 25% of their value.

In other words, in this field the usual presumption of superior knowledge and judgment on the part of the management should not obtain, and any criticism offered in good faith deserves careful consideration by the stockholders. Abuse of Managerial Compensation. Numerous cases have come to light in which the actions of the management in the matter of its own compensation have been open to serious question. Most of these relate to the years before 1933. In the case of Bethlehem Steel Corporation, cash bonuses clearly excessive in amount were paid. In the case of American Tobacco Company, rights to buy stock below the market price, of an enormous aggregate value, were allotted to the officers. These privileges to buy stock are readily subject to abuse. In the case of Electric Bond and Share Company, the management permitted itself to buy many shares of stock at far below market price. When later the price of the stock collapsed to a figure less than the subscription price, the obligation to pay for the shares was cancelled, and the sums already paid were returned to the officers.

Its answer will depend upon the extent to which the corporation’s success is due to their unique or surpassing ability, and this must be very difficult to determine with assurance. But it may not be denied that devious and questionable means were frequently employed to secure these large bonuses to the management without full disclosure of their extent to the stockholders. Stock-option warrants (or long-term subscription rights) to buy shares at low prices, proved an excellent instrument for this purpose—as we have already pointed out in our discussion of stockholder-management relationships. In this field complete and continued publicity is not only theoretically desirable but of practical utility as well. The legislation of 1933–1934 marks an undeniable forward step in this regard, since the major facts of managerial compensation must now be disclosed in registration statements and in annual supplements thereto (Form 10-K).


Order Without Design: How Markets Shape Cities by Alain Bertaud

autonomous vehicles, call centre, colonial rule, congestion charging, creative destruction, cross-subsidies, Deng Xiaoping, discounted cash flows, Donald Trump, Edward Glaeser, en.wikipedia.org, extreme commuting, garden city movement, Google Earth, Jane Jacobs, job satisfaction, Joseph Schumpeter, land tenure, manufacturing employment, market design, market fragmentation, megacity, new economy, New Urbanism, openstreetmap, Pearl River Delta, price mechanism, rent control, Right to Buy, Ronald Coase, self-driving car, Silicon Valley, special economic zone, the built environment, trade route, transaction costs, transit-oriented development, trickle-down economics, urban planning, urban sprawl, zero-sum game

The objective of road pricing in Singapore is to guarantee a minimum peak-hour speed for cars in the CBD, main arterial roads, and expressways. The toll is adjusted during the day for time and location. The monitoring of vehicle speed is done continuously, and toll rates are adjusted quarterly to maintain the minimum speed. In addition, measures have been taken to limit the number of cars on the island by auctioning periodically the right to buy new cars. The effectiveness of Singapore’s congestion pricing policy is demonstrated by figure 5.19. Between 2005 and 2014, the average speed at peak hours has only varied between 61 and 64 km/h for expressways and between 27 and 29 km/h in the business district and arterial roads. During the same period, Singapore’s population increased by 31 percent! Figure 5.19 Evolution of vehicular speeds at peak hours, Singapore.

Urban Road Networks Made of Privately Developed Access Roads Results in Poor Metropolitan Road Networks So far, cities have yet to find a way to entirely rely on the private sector to design, finance, and operate a metropolitan network of roads without any government intervention. It is important to distinguish the provision of local access roads from a road network serving an entire metropolitan area. Private developers routinely provide roads in or at the edges of their property lines. Eventually, ownership of these access roads is typically transferred to a local authority and, later, integrated into the public domain to form a network of interconnected streets. An aggregation of originally privately developed roads constitutes the core of many cities, and the two maps shown in figure 3.2 illustrate this process well. The street networks in the Wall Street area in the historical core of New York and in the Marais neighborhood of Paris have many similarities. The street networks followed original property lines with some internal subdivision created by the original developers.

financial costs represented by interest during construction (interest has to be paid on the amount disbursed between the time land is acquired and the time when the plots are ready to be sold to builders). The total area of land sold by developers to urban land users is therefore less than the area that developers buy from farmers. The roads and open spaces built by developers are usually transferred free of charge to the local authority. The total cost per square meter of salable developed land that will have to clear the market (i.e., that will be on or below the curve U in figure 4.14) is given by equation 4.2. Equation 4.2 Cost per square meter of salable developed land that will clear the market , where k = land development cost per square meter of salable urban land; a = price of agricultural land per square meter; c = cost of civil works per square meter; h = developer overhead; f = financial cost; and r = percent of developed land to be devoted to roads and open space.


pages: 532 words: 162,509

The Other Slavery: The Uncovered Story of Indian Enslavement in America by Andrés Reséndez

Bartolomé de las Casas, British Empire, California gold rush, Columbian Exchange, Dissolution of the Soviet Union, European colonialism, Francisco Pizarro, Jones Act, planetary scale, Right to Buy, transatlantic slave trade, transcontinental railway, War on Poverty

Indeed, the Indian agent likened peonage to chattel slavery: “Peons, you are aware, is but another name for slaves as that term is understood in our Southern States,” he explained in a letter to the commissioner of Indian affairs, adding that the main difference was that the peonage system was not confined to a particular “race of the human family,” but applied to “all colors and tongues.” Indians purchased other Indians, and Mexicans bought other Mexicans, and yet no one seemed to have the slightest objection to being purchasers of their own “kith and kin.” Quite to the contrary, they believed that “the right to buy and sell captives is perfect and that no human power can disturb that right.”7 After broaching the terminology and describing the enthusiasm with which New Mexicans engaged in this other form of enslavement, Calhoun provided some details about the market for captives and relationships with peons. Unlike Georgia or Louisiana, where slave auctions were held in public and centralized places, in New Mexico the traffic of humans was a great deal more fragmented, as owners bought captives from comancheros and acquired “the labor” of convicts at public auctions.

He drifted in the city, eking out a living for more than a month, until, quite by chance, his master spotted him in the Plaza de San Francisco. Rather than risk public scandal or a violent altercation, the master prudently called a guard (police officer), who in turn approached Gaspar. Instead of returning the slave to his master, however, the guard took him to the municipal jail, where the local authorities launched an investigation.13 As a child, immediately after disembarking in Seville, Gaspar had been sold for 36 ducats to a family of tailors and weavers. The bill of sale describes him as a thirteen-year-old “obtained in a just war” who was “not a drunkard or a thief or an escapist” and who had “no public or private illnesses,” all stock phrases that appeared in contracts involving slaves of all races and ethnicities.

There were relatively few encomienda Indians directly involved in Parral’s mining economy, as they were mostly set aside for agricultural and ranching activities. The majority of forced workers in the mines and ore-processing haciendas came from neighboring communities and missions as part of the extensive repartimiento system of forced labor. The system was set in motion when owners requested workers from colonial authorities, specifying the number of Indians needed and the type of work to which they would be assigned. Governors and local authorities would then work out the number of Indian workers (both male and female) that each community and mission was required to contribute to meet these requests. It goes without saying that failure to provide sufficient workers would result in significant repercussions. And, as it is easy to imagine, the actual drafting of these Indians was a process fraught with abuse that could lead to violence.


pages: 364 words: 103,162

The English by Jeremy Paxman

back-to-the-land, British Empire, colonial rule, Corn Laws, Etonian, game design, George Santayana, global village, Isaac Newton, James Hargreaves, Khartoum Gordon, mass immigration, Neil Kinnock, Own Your Own Home, Ralph Waldo Emerson, Right to Buy, sensible shoes, urban sprawl, women in the workforce

The Abbey National Bank, originally a building society, began life as two organizations, one of which, the Abbey Road, had the declared ambition of enabling young men to buy their homes, in order that they could vote, while the National Building Society additionally hoped to convince them there were better things to spend money on than drink. It was a mark of Margaret Thatcher’s deep understanding of some of the instincts of the English (neither the Scots nor the Welsh ever took to her in quite the same way) that she recognized the power of the urge to own property, forcing municipal authorities to give their tenants the right to buy. The consequences of this obsession can be seen in every town in the land. Drive through an English suburb – any suburb – and the thing that strikes you is the fact that almost everyone has given their house a name. Why? There’s a perfectly adequate numbering system, which would make sure the mail got to the right address a lot more easily than any randomly ordered list of Shady Leas, Mon Repos or Dunroamins.

Within fifty years of the docking of the Empire Windrush at Tilbury, disembarking 492 Jamaican immigrants, the racial complexion of the country had changed utterly. Mass immigration to Britain had been concentrated on England and most cities of any size contained areas where white people had become a rarity. In those places, talking about immigrants as ‘ethnic minorities’ was beginning to sound decidedly perverse. By 1998, it was white children who had become a minority at local-authority secondary schools in inner London and even in the suburbs they made up only 60 per cent of the secondary-school population. Over a third of inner London’s children did not even have English as their first language.3 If the English people had changed, so too had the towns in which most of them lived. In his wartime celebration of Englishness, The Lion and the Unicorn, George Orwell managed to escape the dreamy right-wing pastiche about England being all hedgerows and gardens.


pages: 354 words: 110,570

Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World by Tom Wright, Bradley Hope

Asian financial crisis, Bernie Madoff, collapse of Lehman Brothers, colonial rule, corporate social responsibility, Credit Default Swap, Donald Trump, failed state, family office, forensic accounting, Frank Gehry, high net worth, Nick Leeson, offshore financial centre, Ponzi scheme, Right to Buy, risk tolerance, Snapchat, South China Sea, sovereign wealth fund

The problem was that 1MDB had never issued a U.S. dollar bond to international investors, and it had no credit rating. So, Goldman was suggesting it ask IPIC—a sovereign entity with a strong credit rating—to guarantee the issue. That would put investors at ease, giving them confidence that 1MDB would be able to repay the debt whatever the circumstances. In return for its guarantee, IPIC would acquire the rights to buy a stake in the listed power company at a favorable price. This was Low’s latest blueprint for 1MDB, a way for the fund to enter the power-generation business, make some money, and, hopefully, paper over losses. But there were many oddities in the plan. Why would a Malaysian state fund seek a guarantee from a similar fund of another country? Why didn’t Malaysia’s government just offer a sovereign guarantee for the debt?

The FBI put Rich on its most-wanted list, yet he lived the remainder of his life in a sumptuous villa on Lake Lucerne, Switzerland. That sounded pretty good to Low. As time passed without action from the Justice Department, Low became less careful. He allowed the Equanimity to sail out of Thai waters down to the Indonesian resort island of Bali. Robert Heuchling, the FBI agent, and his team were watching, and they flew to Indonesia, persuading local authorities to seize the yacht. Low had lost control of his last major asset bought with 1MDB funds. He had one final play to make, and again he looked to his hero, Marc Rich. On his last day in office—January 20, 2001—President Bill Clinton had granted Rich a pardon. It was a controversial move that led to a debate about the nature of white-collar crime and its victims. The story also kindled hope in Low’s mind.


pages: 868 words: 147,152

How Asia Works by Joe Studwell

affirmative action, anti-communist, Asian financial crisis, bank run, banking crisis, barriers to entry, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collective bargaining, crony capitalism, cross-subsidies, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Deng Xiaoping, failed state, financial deregulation, financial repression, Gini coefficient, glass ceiling, income inequality, income per capita, industrial robot, Joseph Schumpeter, Kenneth Arrow, land reform, land tenure, large denomination, liberal capitalism, market fragmentation, non-tariff barriers, offshore financial centre, oil shock, open economy, passive investing, purchasing power parity, rent control, rent-seeking, Right to Buy, Ronald Coase, South China Sea, The Wealth of Nations by Adam Smith, urban sprawl, Washington Consensus, working-age population

Only the usurers are happy: the independent farmers are mired in poverty while the sugar yield on the land farmed by the Benedictos is a paltry 52 tonnes per hectare, more than 50 per cent less than post-land reform sugar farmers in Taiwan and China (after 1978) achieved. As elsewhere in the Philippines, the beneficiaries of land reform have even greater need of credit, marketing and agricultural extension support than those in north-east Asia did. They are almost always farm labourers, used to being told what to do, rather than the more autonomous tenants who were given the right to buy land in Japan, Korea and Taiwan, or occupy it rent-free in China. Yet where credit and technical support was present in every village in north-east Asia, the Filipinos get almost nothing. Ninety-seven per cent of land reform beneficiaries in Negros told a provincial survey they have received zero support.77 It is hardly surprising that an emblematic image one sees in Negros is the ‘reform’ family that immediately leased its land back to the landowner and now sits around a karaoke TV set bought with the proceeds of the rental advance.

The basic reality of life in the countryside is that land belongs to the collectives, not to individuals, and this has consequences. The most important consequence is that, unlike in Japan, Korea and Taiwan, farmers cannot sell their plots to private buyers. Collective-owned land is unsaleable in law. It can only be converted into government-owned land, in which case compensation is paid to farmers up to a statutory maximum equivalent to thirty years’ rental. Local authorities, however, can sell land converted to state ownership for development. This typically occurs at a big mark-up. Thirty years’ rent may sound like a lot, but China’s historically low yields per person (as opposed to per hectare) have also meant low rents; land redeployed for development or for commercial farming, by contrast, is massively more valuable. In Japan, Korea and Taiwan, many farmers became rich after the Second World War through the re-zoning of farmland – like Nishiyama Kōichi, who went from peasant to millionaire by virtue of selling some of his land to a developer.

A trend to dispossessing farmers has been escalating for a decade, mainly because central government has never reconciled the supply of local government funding with the responsibilities it places on local governments to provide welfare services. In recent years, Beijing has curtailed local governments’ capacity to tax farmers but has not replaced the lost income with central government grants. Instead, local authorities have had to borrow money through off-balance sheet companies they set up.14 When payments on such debts cannot be met from the profits of the businesses they run themselves, they turn to sale of farmland. The media has focused on the conversion and sale of household farms for real estate and factories. But another fast-rising phenomenon is the leasing of former family farms for commercial agribusiness.


pages: 613 words: 200,826

Unreal Estate: Money, Ambition, and the Lust for Land in Los Angeles by Michael Gross

Albert Einstein, Ayatollah Khomeini, bank run, Bernie Madoff, California gold rush, clean water, corporate raider, Donald Trump, estate planning, family office, financial independence, Irwin Jacobs, Joan Didion, Maui Hawaii, McMansion, mortgage debt, Norman Mailer, offshore financial centre, oil rush, passive investing, pension reform, Ponzi scheme, Right to Buy, Robert Bork, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, Steve Wozniak, The Predators' Ball, transcontinental railway, yellow journalism

By the late sixties, the money to pay for Cornfeld’s fun was mostly coming from Germany, where he’d started out selling Dreyfus funds to U.S. servicemen; however, he ended up selling so many IOS fund shares to German nationals that by 1969, 60 percent of its business, about $100 million a month, half of it in cash, was being generated there, according to Cantor. The IOS system had been designed to turn its salesmen into zealots and it reached its apotheosis in Germany. As they rose in the IOS hierarchy based on the revenue from their share sales, thousands of salesmen (known as investment counselors) earned not only their own commissions but a piece of the commissions of those beneath them in the structure, and finally, the right to buy shares in the parent company; this was considered the pot of gold at the end of the IOS rainbow, and it made many of its sales managers millionaires, on paper at least. Not that there wasn’t still real cash to burn, and Cornfeld did, entering the investment banking business in the late sixties by both underwriting offerings and making large investments via its funds in everything from the hot conglomerate stocks of what became known as the Go-Go era on Wall Street to real estate, oil exploration, and hotels.

Hilton had promised each of them the listing that the family decided to give it to none of them. We didn’t want any hard feelings. Anyway, we feel the house will sell itself.” The house and, as his son Barron put it, “essentially all of his wealth, principally in the form of Hilton Hotels stock,” then worth about $164 million, had been left to the Conrad N. Hilton Foundation, founded to assist Roman Catholic nuns. Barron would fight for years for the right to buy that stock at its 1979 price, finally prevailing in 1988, when its value had risen to almost $700 million. In an out-of-court settlement, Barron got 4 million shares outright and another 6 million in a charitable trust (that reverts to the foundation on his death), and the foundation got the remaining 3.5 million shares; the battle solidified Barron’s control of Hilton Hotels. Like his father, Barron committed to giving most of his fortune to the Hilton Foundation.

One source of his animus was likely what happened when he hired former Los Angeles chief of police Tom Reddin as the boss of American Protection’s 1,100 security guards, who watched over facilities stretching from downtown L.A. to the airport, where they screened passengers and guarded incoming flights. A year later, Reddin resigned after an argument with Resnick. Six months after that, in a sting operation likely initiated by the embittered former top cop, three of Resnick’s former employees at LAX were arrested on charges they’d sold two pounds of pure heroin to undercover officers, and a federal organized crime task force and state and local authorities were reportedly looking into American Protection’s role in what appeared to be a case of massive fraud against an airline, possibly involving New York Mafia figures. Resnick denied any involvement and said that rogue employees had been dismissed months before. Two weeks later, American Protection sued Reddin for stealing customers and trade secrets. Reddin called the suit baseless, explaining that he never solicited customers, though he had taken on some “who could no longer condone [their] business practices.”


pages: 376 words: 121,254

Cocaine Nation: How the White Trade Took Over the World by Thomas Feiling

anti-communist, barriers to entry, crack epidemic, deindustrialization, illegal immigration, informal economy, inventory management, Kickstarter, land reform, Lao Tzu, mandatory minimum, moral panic, offshore financial centre, RAND corporation, Right to Buy, Ronald Reagan, Stanford prison experiment, trade route, upwardly mobile, yellow journalism

Goods and goodies have become indispensable to our personal happiness as well as that of the wider economy. As pleasure and profitability become paramount, and the global drug economy continues to thrive, the distinction between a chocolate cake, a fine single malt and a line of cocaine has become blurred. Many consumers would argue that if they have the money to pay for all three, they have the right to buy all three. Drug sub-cultures still exist. They are a way of life and an important part of the self-identity of some young people. Asking some teenagers to give up smoking cigarettes is tantamount to asking them to give up their credibility in the only peer support system they have. Drug use was so important to a specific sub-culture of the 1960s that it was regarded by friends and foes alike as an ideological statement.

In France they’ve gone up three-fold over the same period, and in Germany they’ve gone up fourfold. In all three countries, more than half of those arrests were for possession of cannabis. Europe is clearly caught between the prohibitionist model and the harm reduction model, and is failing to resolve the contradictions implicit in both.10 The pressure to break this stalemate is coming from cities with large drug-using populations, where the local authorities are straining at the leash to reform their drugs policies. In 2001, Portugal introduced a pioneering law which decriminalized the possession of all illicit substances for personal use.11 Law 30/2000 did not legalize drug use or possession, but it did put an end to the use of penal sanctions. Some users face fines, others are recommended for treatment through Commissions for the Dissuasion of Drug Addiction.


The Age of Turbulence: Adventures in a New World (Hardback) - Common by Alan Greenspan

"Robert Solow", addicted to oil, air freight, airline deregulation, Albert Einstein, asset-backed security, bank run, Berlin Wall, Bretton Woods, business cycle, business process, buy and hold, call centre, capital controls, central bank independence, collateralized debt obligation, collective bargaining, conceptual framework, Corn Laws, corporate governance, corporate raider, correlation coefficient, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cuban missile crisis, currency peg, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, double entry bookkeeping, equity premium, everywhere but in the productivity statistics, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, full employment, Gini coefficient, Hernando de Soto, income inequality, income per capita, invisible hand, Joseph Schumpeter, labor-force participation, laissez-faire capitalism, land reform, Long Term Capital Management, Mahatma Gandhi, manufacturing employment, market bubble, means of production, Mikhail Gorbachev, moral hazard, mortgage debt, Myron Scholes, Nelson Mandela, new economy, North Sea oil, oil shock, open economy, Pearl River Delta, pets.com, Potemkin village, price mechanism, price stability, Productivity paradox, profit maximization, purchasing power parity, random walk, reserve currency, Right to Buy, risk tolerance, Ronald Reagan, shareholder value, short selling, Silicon Valley, special economic zone, stocks for the long run, the payments system, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, trade liberalization, trade route, transaction costs, transcontinental railway, urban renewal, working-age population, Y2K, zero-sum game

The first was the rapid retreat of U.S. forces in the face of masses of Chinese military crossing the Yalu River into North Korea in the winter of 1950; the second, our humiliation in abandoning South Vietnam in 1975. We may have lost the battles, but not the war. Both Communist China and Communist Vietnam have been struggling to loosen their central-planning straitjackets for the economic freedom of capitalism, while trying not to say out loud what they are doing. In 2006, America's Merrill Lynch, following Citigroup a year earlier, obtained the right to buy, sell, and market Vietnamese shares on Ho Chi Minh City's fledgling stock exchange. When Bill Gates, the world's richest capitalist, visited Hanoi, he was greeted by Vietnam's top Communist Party leaders and mobbed in admiration. Will miracles never cease? Ideas do matter. Indeed America's capitalistic ideas appeared mightier than our sword. P erhaps more than any of the other major countries addressed in this book, India symbolizes most powerfully both the productiveness of market capitalism and the stagnation of socialism.

The role of judges and the Russian courts, which were notoriously corrupt, has been redefined to reduce opportunities for bribery and the political manipulation of verdicts. For instance, laws promulgated in 2001 removed many economically meaningless requirements for businesses to obtain licenses, inspections, and product certifications—red tape that had been an open-ended invitation for official corruption. (Low-wage bureaucratic jobs were thus in great demand.) Property rights have been extended in recent years, though struggles over rights to buy and sell farmland reflect much the same Communist ideological hangover that exists in China. Except to challenge the power of the Kremlin, the Russian people are free—to travel, to congregate, and to engage in all the trappings of democratic societies. The Russian economy is today best described as a market economy backed by a still-imperfect rule of law. A significant segment of the nation's most valued assets is in the hands of the state or of Kremlin allies.

Rights to land in the countryside, where 737 million Chinese reside, is another matter. Granting property rights to farmland is too unambiguous a break with Communist traditions to be countenanced easily. Farmers can lease land and sell products in open markets, but they have no legal rights to the land they till, and so cannot buy or sell it or use it as collateral for loans. In recent decades, as urbanization has encroached on rural China, local authorities have seized enormous expanses, granting as compensation only a small fraction of what the land would be worth as part of an urban enclave. Such seizures have been one of the main contributors to recent rising levels of protests and unrest. A top Chinese police official reported that the number of public protests nationwide rose to seventy-four thousand in 2004 from ten thousand a decade earlier.


pages: 436 words: 76

Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor by John Kay

"Robert Solow", Albert Einstein, Asian financial crisis, Barry Marshall: ulcers, Berlin Wall, Big bang: deregulation of the City of London, business cycle, California gold rush, complexity theory, computer age, constrained optimization, corporate governance, corporate social responsibility, correlation does not imply causation, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, Donald Trump, double entry bookkeeping, double helix, Edward Lloyd's coffeehouse, equity premium, Ernest Rutherford, European colonialism, experimental economics, Exxon Valdez, failed state, financial innovation, Francis Fukuyama: the end of history, George Akerlof, George Gilder, greed is good, Gunnar Myrdal, haute couture, illegal immigration, income inequality, industrial cluster, information asymmetry, intangible asset, invention of the telephone, invention of the wheel, invisible hand, John Meriwether, John Nash: game theory, John von Neumann, Kenneth Arrow, Kevin Kelly, knowledge economy, light touch regulation, Long Term Capital Management, loss aversion, Mahatma Gandhi, market bubble, market clearing, market fundamentalism, means of production, Menlo Park, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Naomi Klein, Nash equilibrium, new economy, oil shale / tar sands, oil shock, Pareto efficiency, Paul Samuelson, pets.com, popular electronics, price discrimination, price mechanism, prisoner's dilemma, profit maximization, purchasing power parity, QWERTY keyboard, Ralph Nader, RAND corporation, random walk, rent-seeking, Right to Buy, risk tolerance, road to serfdom, Ronald Coase, Ronald Reagan, second-price auction, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, Steve Jobs, telemarketer, The Chicago School, The Market for Lemons, The Nature of the Firm, the new new thing, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, total factor productivity, transaction costs, tulip mania, urban decay, Vilfredo Pareto, Washington Consensus, women in the workforce, yield curve, yield management

The second (popularized by Oliver Williamson) supposes that rational choices are made from within a subset of all possibilities that are themselves rationally chosen, i.e., balancing the costs of obtaining information against the benefits. Thus one interpretation effectively abandons conventional assumptions of rationality; the other transforms it into metarationality. { 362} call option comparative advantage competitive advantage competitive equilibrium competitive market convexity derivative division of labor economic rent Glossary The right to buy a security at a fixed price (even if its market price has risen in the meantime). Thus you share the upside, but not the downside, of its movements. In return for this, you pay a premium. A country (or less commonly an individual) has a comparative advantage in the activities that it is relatively best at. See page 84. Distinguish from competitive (absolute) advantage. A firm has a competitive (absolute) advantage in activities that it performs better than other firms.

In New York, Robert Moses, an unelected official, gathered autocratic power in an environment of ostensible democracy. Would it not be better if wise men came together, in a single institution, to assemble the evidence, consider it dispassionately, and set the direction for the industry? That is what central planning in a democratic society is intended to achieve. In 1947, the British electricity industry was nationalized. Most Culture and Prosperity {Ill} of the business was already owned by local authorities. The importance of the change was that it brought the generation and distribution of electricity under central government control. In the decades immediately after the World War II, there were great expectations for the peaceful exploitation of nuclear energy. Britain had developed a limited nuclear technology for military purposes and had experimented with adaptations designed to produce commercial supplies of electricity.


pages: 476 words: 138,420

Lost Kingdom: The Quest for Empire and the Making of the Russian Nation by Serhii Plokhy

affirmative action, Dissolution of the Soviet Union, Mikhail Gorbachev, New Urbanism, Right to Buy, Ronald Reagan, trade route, Transnistria, union organizing, zero-sum game, éminence grise

In its struggle with the imperial center, the Polish Catholic nobility had appealed for and often obtained support from its Ukrainian and Belarusian subjects because of this religious affinity. The government wanted to drive a wedge between the elites and the ruled. It employed every means at its disposal, including the concept of official nationality formulated by Count Uvarov, to that end. In November 1832, the Western Committee issued a decree intended to diminish the number of people in the western provinces who could claim noble rights, including the right to buy land and serfs—a measure designed to undermine the status of Polish nobles. In the 1840s, Nicholas promoted initiatives to register and limit peasant obligations to landowners in order to support “Russian” peasants. To the degree that a noble-based empire could do so, it was taking the side of the Ukrainian and Belarusian peasantry against Polish nobility. Other policies included the liquidation of urban self-government and the abolition of the local law code, which went back to the times of Polish and Lithuanian rule over the region.

He prepared a parliamentary resolution on Ukrainian autonomy but was unable to present it, as the imperial authorities dissolved the First Duma on July 8, 1906, only seventy-two days after its opening. The tsar found the ideas and actions of the deputies destructive. “The representatives of the nation, instead of applying themselves to the work of productive legislation, have strayed into spheres beyond their competence and have been making inquiries into the acts of local authorities established by ourselves, and have been making comments on the imperfections of the fundamental laws, which can only be modified by our imperial will,” read the tsar’s manifesto on the dissolution of the Duma. The Ukrainian deputies were able to form a caucus of forty-seven in the short-lived Second Duma (February–June 1907), where they again raised the banner of Ukrainian autonomy. But the change of electoral legislation accompanying the dissolution of the Second Duma—the tsar found it even less agreeable than the first—favored large landowners and made it difficult to elect Ukrainophile deputies, who were often supported by peasants, to the Third Duma.


pages: 454 words: 139,350

Jihad vs. McWorld: Terrorism's Challenge to Democracy by Benjamin Barber

airport security, anti-communist, Apple's 1984 Super Bowl advert, Ayatollah Khomeini, Berlin Wall, borderless world, Bretton Woods, British Empire, computer age, Corn Laws, Corrections Corporation of America, David Brooks, deindustrialization, Deng Xiaoping, digital map, Fall of the Berlin Wall, Francis Fukuyama: the end of history, full employment, George Gilder, global village, invisible hand, Joan Didion, Kevin Kelly, laissez-faire capitalism, late capitalism, Live Aid, market fundamentalism, Marshall McLuhan, minimum wage unemployment, new economy, Norbert Wiener, North Sea oil, pirate software, postnationalism / post nation state, profit motive, race to the bottom, Right to Buy, road to serfdom, Ronald Reagan, The Wealth of Nations by Adam Smith, Thomas L Friedman, undersea cable, young professional, zero-sum game

Thomas Friedman, in a version of the McWorld argument, has suggested that the fratricidal warriors facing one another in Ireland, South Africa, and the Middle East may have been lured from their intractable internecine struggles by the global marketplace, all of them “compelled to beat their swords into plowshares simultaneously by economic forces.”7 But peace is not democracy. McWorld’s denizens are consumers and clients whose freedom consists of the right to buy in markets they cannot control and whose identity is imposed on them by a consumerism they scarcely notice. Palestinians and Zulus and North Ireland Catholics will be freer to do business in and outside of their stabilized countries, but they will not necessarily be any freer. Not long after World War II, Victor Lebow recognized that “Our enormously productive economy … demands that we make consumption our way of life, that we convert the buying and selling of goods into rituals, that we seek our spiritual satisfaction, our ego satisfaction, in consumption.”8 Today, as Alan Durning remarks, “the words ‘consumer’ and ‘person’ have become virtual synonyms.

The same French government that successfully exempted the French audiovisual industry from the last GATT round played a major role a few years earlier (along with leading French financial institutions) in assembling the property and building the hotels for EuroDisney. They even financed a stop on the express train service that is France’s pride. The French private sector retains a 51 percent holding in EuroDisney today, though its poor performance in its first years has left investors with a bad taste and Disney with its first prospective fiasco. In the self-effacing spirit of government under assault, the state has mostly stayed on the sidelines. Local authorities have the right to demand concessions from developers to allow curb cuts and building permits, but they have played the zealous suitor to, rather than the public regulator of, the developers and have asked little. Indeed, H. Wayne Huizenga, the Blockbuster video magnate who also owns a group of professional sports clubs and recently merged Blockbuster with Viacom, Paramount’s successful buyer, has also persuaded the Florida legislature to allow him to build “Blockbuster Park” on twenty-five hundred acres of swampland north of Miami as a kind of sixty-eighth Florida county.


pages: 476 words: 139,761

Kleptopia: How Dirty Money Is Conquering the World by Tom Burgis

active measures, Anton Chekhov, banking crisis, Bernie Madoff, Big bang: deregulation of the City of London, Boris Johnson, British Empire, collapse of Lehman Brothers, coronavirus, corporate governance, COVID-19, Covid-19, credit crunch, Credit Default Swap, cryptocurrency, do-ocracy, Donald Trump, energy security, Etonian, failed state, Gordon Gekko, high net worth, Honoré de Balzac, illegal immigration, invisible hand, Julian Assange, liberal capitalism, light touch regulation, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Mohammed Bouazizi, Northern Rock, offshore financial centre, Right to Buy, Ronald Reagan, Skype, sovereign wealth fund, trade route, WikiLeaks

The gas came from Central Asia, passed through Russia and arrived in Ukraine, where some of it remained and some of it continued westward. The progress of this commodity along this route – and Vladimir Putin’s ability to arrest that progress – ranked among the highest concerns of Europe’s leaders. And yet no one knew who controlled RosUkrEnergo. Like a couple of similarly opaque predecessors, it had been granted the precious right to buy the gas in the East, pipe it through Russia and sell it in the West, a transaction from which it earned annual profits approaching $1 billion. Half of RosUkrEnergo belonged to Gazprom, the Russian state gas company run by an old pal of Putin’s, curiosity about which could land inquisitive foreigners like John Lough of TNK-BP in big trouble. The other half belonged to whoever was hiding behind the bankers at Raiffeisen.

Three years earlier she had arrived from Egypt. She dreamed one day of moving to a little Victorian house. Her husband was away. She was at home with her two small daughters. As the fire approached, she started to panic. She said a prayer. Then she said: ‘It’s over. It is here.’ Seventy-two of Grenfell Tower’s residents died on the night of June 14, 2017. The remaining 250 needed shelter. But the local authority announced that finding them new homes would be tricky: there was a shortage. In fact, there was no such thing. Houses were plentiful. It was just that nearly 2,000 of them were empty. Much of the area belonged to front companies registered in the British Virgin Islands, Gibraltar or Jersey. The former Underground station once used as Winston Churchill’s secret command centre, worth $87 million but unoccupied, belonged to Dmytro Firtash, the Ukrainian oligarch behind the natural gas scheme in which the Americans believed the Brainy Don had a hidden interest.


pages: 517 words: 155,209

Kingdom of Olives and Ash: Writers Confront the Occupation by Michael Chabon

airport security, banking crisis, Berlin Wall, Boycotts of Israel, call centre, clean water, Donald Trump, facts on the ground, Fellow of the Royal Society, glass ceiling, land tenure, mental accounting, Nelson Mandela, off grid, Right to Buy, Skype, traveling salesman, WikiLeaks

Fassouta, my village, for example, has 11,000 dunums (1 dunum equals 1,000 square meters) within the jurisdiction of its local council, yet only 650 dunums have been approved by the government for new building expansion since 1988. The result is overcrowding and having to leave and find homes elsewhere. But many Jewish communities forbid Palestinians from living or even working in them, and some Palestinians have had to resort to lawsuits to secure the right to buy an apartment if they happen to have Jewish neighbors. We are treated as pariahs, unwanted and unwelcome. In a recent example, a Jewish member of parliament advocated the separation of Arab and Jewish women in maternity wards of hospitals, and several medical institutions are reported to have taken heed. One day, a man I will call Moshe, one of my colleagues at work, stood in the doorway of my small office, beaming, coffee cup in hand.

My mind unwittingly turns to how they came about—by military force and land grabs, and at the cost of ousting another people and taking their place. Second, the Israeli state budget allocated for infrastructure and economic development in Arab towns and villages is a fraction of that allotted to Jewish ones. So are budgets for health, education, housing, and employment; the list goes on. There is a caveat that the state uses to propagate this practice: government budgets are allocated to each local authority based on the amount of tax revenue collected by that authority, including business and property taxes. With the number of employment initiatives and businesses in Arab municipalities being a bare minimum, the taxes collected are also small, compared with those collected in government-aided Jewish communities. Thus, rather than funding economic development projects in Arab areas, the government allocates smaller budgets to them—in proportion to their economic output—and the vicious cycle continues.


pages: 486 words: 150,849

Evil Geniuses: The Unmaking of America: A Recent History by Kurt Andersen

affirmative action, Affordable Care Act / Obamacare, airline deregulation, airport security, always be closing, American ideology, American Legislative Exchange Council, anti-communist, Apple's 1984 Super Bowl advert, artificial general intelligence, autonomous vehicles, basic income, Bernie Sanders, blue-collar work, Bonfire of the Vanities, bonus culture, Burning Man, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, centre right, computer age, coronavirus, corporate governance, corporate raider, COVID-19, Covid-19, creative destruction, Credit Default Swap, cryptocurrency, deindustrialization, Donald Trump, Elon Musk, ending welfare as we know it, Erik Brynjolfsson, feminist movement, financial deregulation, financial innovation, Francis Fukuyama: the end of history, future of work, game design, George Gilder, Gordon Gekko, greed is good, High speed trading, hive mind, income inequality, industrial robot, interchangeable parts, invisible hand, Isaac Newton, James Watt: steam engine, Jane Jacobs, Jaron Lanier, Jeff Bezos, jitney, Joan Didion, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, knowledge worker, low skilled workers, Lyft, Mark Zuckerberg, market bubble, mass immigration, mass incarceration, Menlo Park, Naomi Klein, new economy, Norbert Wiener, Norman Mailer, obamacare, Peter Thiel, Picturephone, plutocrats, Plutocrats, post-industrial society, Powell Memorandum, pre–internet, Ralph Nader, Right to Buy, road to serfdom, Robert Bork, Robert Gordon, Robert Mercer, Ronald Reagan, Saturday Night Live, Seaside, Florida, Second Machine Age, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, Stewart Brand, strikebreaker, The Death and Life of Great American Cities, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, union organizing, universal basic income, Unsafe at Any Speed, urban planning, urban renewal, very high income, wage slave, Wall-E, War on Poverty, Whole Earth Catalog, winner-take-all economy, women in the workforce, working poor, young professional, éminence grise

Pornography is “a problem of pollution of the moral and aesthetic atmosphere precisely analogous to smoke pollution” and possibly an even greater danger to public health, so it was okay to outlaw smut. Bork declared elsewhere in the article that the quintessentially political act of burning an American flag shouldn’t count as free speech either, because the flag is, you know, “unique.” Likewise, he wrote that the Supreme Court decision that individuals’ rights to privacy included the right to buy contraceptives was “utterly specious” and “unprincipled.” Likewise, Bork ruled as a federal judge that the navy could fire a sailor for being gay because there was no explicit “constitutional right to engage in homosexual conduct”—although as a professor he’d also just argued for welcoming employers to Yale who discriminated against gays because Yale simply shouldn’t “ratify homosexuality.” And likewise, he said that the Constitution’s equal protection clause shouldn’t prohibit discrimination against women—yet also that amending the Constitution to guarantee equal rights for women would be a bad idea.

Because cable had initially been a collection of who-really-cares little local businesses stealing and streaming network shows, the federal government barely bothered to regulate it, leaving that to towns and counties, which set the rates that their local operators could charge. But then in the early 1980s, as cable and TV were about to become synonymous—a utility that almost everyone would pay for, like water and electricity—the big businesses that were taking over the industry saw an opportunity. They got Washington, in full deregulation mania, to radically deregulate their booming industry—specifically, to make it illegal for local authorities to regulate the fees the local cable monopolists could charge local citizens. The Senate passed the bill 87–9, the House on a voice vote, and Reagan signed it into law a week before his landslide reelection in 1984. Right away the cable operators did what monopolists do: in the first four years after deregulation took effect, the average cost of the most basic cable service rose 61 percent.


Betrayal of Trust: The Collapse of Global Public Health by Laurie Garrett

accounting loophole / creative accounting, airport security, Albert Einstein, anti-communist, Ayatollah Khomeini, Berlin Wall, biofilm, clean water, collective bargaining, desegregation, discovery of DNA, discovery of penicillin, Drosophila, employer provided health coverage, Fall of the Berlin Wall, germ theory of disease, global pandemic, illegal immigration, indoor plumbing, Induced demand, John Snow's cholera map, Jones Act, Louis Pasteur, Mahatma Gandhi, mass incarceration, Maui Hawaii, means of production, Menlo Park, Mikhail Gorbachev, mouse model, Nelson Mandela, new economy, nuclear winter, phenotype, profit motive, Project Plowshare, RAND corporation, randomized controlled trial, Right to Buy, Ronald Reagan, sexual politics, Silicon Valley, stem cell, the scientific method, urban decay, urban renewal, War on Poverty, working poor, Works Progress Administration, yellow journalism

Bosses now prefer to be paid in share options, which are far more valuable than mere metal. Tipping the scales—let’s be kind, and ignore those boardroom lunches—at around two hundred pounds, and with gold now at about $258 a tray ounce, the average chief executive officer of America’s top two hundred firms would take home just over $750,000 in gold. In fact, in 1998 he made a pre-tax profit of $8.3 million by exercising executive share options, which give the right to buy a fixed number of his company’s shares at a fixed price in what is now a risky market. At the end of last year, he also had total unrealized profits on stock options of nearly $50 million.” (See “Share and share unalike.” The Economist (August 7, 1999): 18.) Half of the CEOs of the top two hundred U.S. corporations earned through such stock options more than $31 million—each—in 1998, or nearly 350 times the average U.S. per capita income.

Their blood fights attracted fleas, allowing for a surge in that insect population. Thus, he argued, what was seen in the tiny village of Mamala, population 375, was likely to also be occurring in earthquake-ravaged villages throughout the region. The earthquake had disrupted the health care infrastructure of the region, leveling clinics and driving physicians and nurses from their homes. So local authorities were hard-pressed to identify and treat all the bubonic plague cases. And further exacerbating the problem was the monsoon, which in 1994 was the most powerful one anyone could recall. Roads were washed out, turning even a short distance into a severe, lengthy journey. A reporter who attempted to travel the roughly 400 kilometers (or 240 miles) of roads from Bombay to Latur had to give up after fourteen grueling hours of dodging elephants, diesel trucks, sacred cows, and other vehicles on a road frequently narrowed to less than a truck’s width of passable pavement.

On September 20, Parmar and Gupta cornered their new boss, the recently appointed medical supervisor of Civil Hospital, Dr. Dinesh Shah. A middle-aged man accustomed to the reins of authority, Shah wanted to see the lab work himself. After examining under the microscope smear samples from the patients, he said, “Yes, looks like pneumonic plague.” Shah ordered smears sent to the National Center for Infectious Diseases in New Delhi and contacted local authorities. But privately he was troubled by seemingly odd aspects of Surat’s outbreak. There were no plague-dead rats in the city; all of the first cases were adult men, which seemed strange; there were no initial pediatric cases, which violated patterns seen historically. “It’s very surprising,” Shah told his staff. “No ratfall. This just came in straight to the city in pneumonic form. Did someone from Beed come here?


pages: 1,057 words: 239,915

The Deluge: The Great War, America and the Remaking of the Global Order, 1916-1931 by Adam Tooze

anti-communist, bank run, banking crisis, British Empire, centre right, collective bargaining, Corn Laws, credit crunch, failed state, fear of failure, first-past-the-post, floating exchange rates, German hyperinflation, imperial preference, labour mobility, liberal world order, mass immigration, Mikhail Gorbachev, Monroe Doctrine, mutually assured destruction, negative equity, price stability, reserve currency, Right to Buy, the payments system, trade route, transatlantic slave trade, union organizing, zero-sum game

The Chinese delegation had wanted a specific commitment to the integrity of the Chinese Republic, but Japan thought it better not to prejudge the question of the Chinese constitution.22 Nevertheless, this commitment went further than all previous guarantees in promising to uphold China’s political as well as its territorial integrity. In what they regarded as a major concession, Britain persuaded Japan to evacuate all its troops from the hotly contested Shandong Peninsula. Japan promised China the right to buy out the German railway lease over a 15-year period. Here, too, Tokyo’s retreat was in line with the strategic reorientation initiated by Hara and pushed forward by Takahashi. A year earlier, in the summer of 1920, Tokyo had once again faced a crisis in its China policy. Its favoured warlord Duan Qirui had been ousted as Prime Minister for the second time by the Zhili faction led by Generals Wu Pei Fu and Cao Kun.23 Amongst the Japanese army stationed in Manchuria, there were influential voices demanding that Japan’s Manchurian client Chang Tso-lin should use this opportunity to extend his power in the north-east and even as far as Mongolia.

The most pressing priority was grain. In 1918 Austria and Germany confidently expected at least 1 million tons from their new ally. But by the end of April it had become clear that ‘exploiting’ the bread basket of the Ukraine would present more problems than these fantasies allowed. If they were to avoid the enormous costs of a full-scale occupation, Austria and Germany needed a cooperative local authority to collaborate with them. Having been driven out of Kiev, only to be restored courtesy of the German Army, the Rada needed a breathing space to re-establish itself. But the scale and urgency of Germany and Austria’s economic demands made this impossible.33 In Ukraine, as in the rest of revolutionary Russia, the only way to secure popular legitimacy was to cede possession of the land to the peasants.34 Over the summer of 1917 a nationwide land grab had redistributed the gentry’s estates.

48 The ground plan of this ‘quarter-way house’ was worked out between Montagu, Chelmsford, the leadership of the Congress and the Muslim League over the winter of 1917–18. The particulars, especially regarding electoral provisions, were further elaborated in Westminster committee and shepherded through Parliament by Sinha, who became the first Indian to be raised to the peerage, in 1919. Governmental authority in India was divided between a central executive, provincial governments and local authorities. Central and provincial governments were to be answerable to legislative councils constituted in part through nomination and in part through electorates of varying size. Significantly, by 1922, the British relinquished all official control over local government in India and the urban franchise was rapidly expanded.49 At the provincial level, the equivalent of medium-sized European states, the make-up of the electorate varied, with special representation being granted to landowners and urban business interests.


pages: 741 words: 179,454

Extreme Money: Masters of the Universe and the Cult of Risk by Satyajit Das

affirmative action, Albert Einstein, algorithmic trading, Andy Kessler, Asian financial crisis, asset allocation, asset-backed security, bank run, banking crisis, banks create money, Basel III, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Bonfire of the Vanities, bonus culture, Bretton Woods, BRICs, British Empire, business cycle, capital asset pricing model, Carmen Reinhart, carried interest, Celtic Tiger, clean water, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, debt deflation, Deng Xiaoping, deskilling, discrete time, diversification, diversified portfolio, Doomsday Clock, Edward Thorp, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Fall of the Berlin Wall, financial independence, financial innovation, financial thriller, fixed income, full employment, global reserve currency, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, happiness index / gross national happiness, haute cuisine, high net worth, Hyman Minsky, index fund, information asymmetry, interest rate swap, invention of the wheel, invisible hand, Isaac Newton, job automation, Johann Wolfgang von Goethe, John Meriwether, joint-stock company, Jones Act, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, laissez-faire capitalism, load shedding, locking in a profit, Long Term Capital Management, Louis Bachelier, margin call, market bubble, market fundamentalism, Marshall McLuhan, Martin Wolf, mega-rich, merger arbitrage, Mikhail Gorbachev, Milgram experiment, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, Naomi Klein, negative equity, NetJets, Network effects, new economy, Nick Leeson, Nixon shock, Northern Rock, nuclear winter, oil shock, Own Your Own Home, Paul Samuelson, pets.com, Philip Mirowski, plutocrats, Plutocrats, Ponzi scheme, price anchoring, price stability, profit maximization, quantitative easing, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Ray Kurzweil, regulatory arbitrage, rent control, rent-seeking, reserve currency, Richard Feynman, Richard Thaler, Right to Buy, risk-adjusted returns, risk/return, road to serfdom, Robert Shiller, Robert Shiller, Rod Stewart played at Stephen Schwarzman birthday party, rolodex, Ronald Reagan, Ronald Reagan: Tear down this wall, Satyajit Das, savings glut, shareholder value, Sharpe ratio, short selling, Silicon Valley, six sigma, Slavoj Žižek, South Sea Bubble, special economic zone, statistical model, Stephen Hawking, Steve Jobs, survivorship bias, The Chicago School, The Great Moderation, the market place, the medium is the message, The Myth of the Rational Market, The Nature of the Firm, the new new thing, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, trickle-down economics, Turing test, Upton Sinclair, value at risk, Yogi Berra, zero-coupon bond, zero-sum game

In a typical accumulator contract, the investor commits to purchase, or accumulate, a fixed number of shares per day at a pre-agreed price (the accumulator price) for a fixed period, typically 3–12 months. The accumulator price is set typically 10–20 percent below the market price of the shares at the time you enter the contract. If the market price of the shares rises above a prespecified level (the knock-out price), the investor’s right to buy the shares knocks out, limiting upside gains. The knock-out price typically is set 5 percent above the market price of the shares at the time you enter the contract. If the market price remains below the knock-out price, the investor continues to accumulate the shares. If the market price falls below the accumulator price (typically a decline of more than 10–20 percent from the commencement of the contract), the investor must keep purchasing the shares, meaning unlimited downside risk.

Officials did not grasp that interest costs would be higher if rates fell. Italian law only allows councils to restructure funding arrangements if it leaves them in a better position than before. The banks claimed that Milan was a financially sophisticated party and understood the transactions. In 2009, around 600 Italian town councils disclosed losses from derivative transactions entered into in the belief that they were hedges. Around 700 German local authorities were also found to have similar problems. In Austria the state-owned railway made a loss of €420 million on derivatives, suing a bank alleging that risks had not been disclosed. It is unclear whether Jefferson County, Harvard, and Milan had been fooled by bankers or were foolish in entering into transactions without understanding the risks. Michael Lewis’ warning that munis were a financial backwater was wrong.


pages: 725 words: 221,514

Debt: The First 5,000 Years by David Graeber

Admiral Zheng, anti-communist, back-to-the-land, banks create money, Bretton Woods, British Empire, carried interest, cashless society, central bank independence, colonial rule, commoditize, corporate governance, David Graeber, delayed gratification, dematerialisation, double entry bookkeeping, financial innovation, fixed income, full employment, George Gilder, informal economy, invention of writing, invisible hand, Isaac Newton, joint-stock company, means of production, microcredit, money: store of value / unit of account / medium of exchange, moral hazard, oil shock, Panopticon Jeremy Bentham, Paul Samuelson, payday loans, place-making, Ponzi scheme, price stability, profit motive, reserve currency, Right to Buy, Ronald Reagan, seigniorage, sexual politics, short selling, Silicon Valley, South Sea Bubble, Thales of Miletus, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transatlantic slave trade, tulip mania, upwardly mobile, urban decay, working poor, zero-sum game

Economically, the apparatus is pure dead weight; all the guns, surveillance cameras, and propaganda engines are extraordinarily expensive and really produce nothing, and no doubt it’s yet another element dragging the entire capitalist system down—along with producing the illusion of an endless capitalist future that laid the groundwork for the endless bubbles to begin with. Finance capital became the buying and selling of chunks of that future, and economic freedom, for most of us, was reduced to the right to buy a small piece of one’s own permanent subordination. In other words, there seems to have been a profound contradiction between the political imperative of establishing capitalism as the only possible way to manage anything, and capitalism’s own unacknowledged need to limit its future horizons lest speculation, predictably, go haywire. Once it did, and the whole machine imploded, we were left in the strange situation of not being able to even imagine any other way that things might be arranged.

We don’t know the mechanisms that brought this world about, but the role of debt was surely significant. The creation of thousands of Hindu temples alone must have involved hundreds of thousands, even millions, of interest-bearing loans—since, while Brahmins were themselves forbidden to lend money at interest, temples were not. We can already see, in the earliest of the new law-codes, the Laws of Manu, the way that local authorities were struggling to reconcile old customs like debt peonage and chattel slavery with the desire to establish an overarching hierarchical system in which everyone knew their place. The Laws of Manu carefully classify slaves into seven types depending on how they were reduced to slavery (war, debt, self-sale …) and explain the conditions under which each might be emancipated—but then go on to say that Sudras can never really be emancipated, since, after all, they were created to serve the other castes.14 Similarly, where earlier codes had established a 15-percent annual rate of interest, with exceptions for commercial loans,15 the new codes organized interest by caste: stating that one could charge a maximum of 2 percent a month for a Brahmin, 3 percent for a Ksatriya (warrior), 4 percent for a Vaisya (merchant), and 5 percent for a Sudra—which is the difference between 24 percent annually on the one extreme and a hefty 60 percent on the other.16 The laws also identify five different ways interest can be paid, of which the most significant for our concerns is “bodily interest”: physical labor in the creditor’s house or fields, to be rendered until such time as the principal is cleared.


pages: 782 words: 245,875

The Power Makers by Maury Klein

Albert Einstein, Albert Michelson, animal electricity, Augustin-Louis Cauchy, British Empire, business climate, invention of radio, invention of the telegraph, Isaac Newton, James Watt: steam engine, Louis Pasteur, luminiferous ether, margin call, Menlo Park, price stability, railway mania, Right to Buy, the scientific method, trade route, transcontinental railway, working poor

In 1885, however, Coffin dispensed with Goff and began putting together his own sales staff with district offices in major cities. He also poured money into advertising in electrical journals to promote the virtues of the Thomson-Houston system. Like Edison, Coffin accepted the securities of fledgling central station companies as part payment for the equipment they bought; unlike Edison, he refused stock and took only bonds. These bonds he put into a series of trusts and offered Thomson-Houston stockholders the right to buy stock in the trusts. When these trusts were finally dissolved, they returned two dollars for every dollar invested.23 By 1886 all Thomson-Houston equipment was being sold by its own salesmen under the company’s own name. Coffin used the funds from the sale of trust stocks to enlarge the Lynn factory and to buy smaller rival firms, some of which he first intimidated by suing them for infringing Thomson’s patented regulator.

He promptly galvanized the organization into a forceful advocate of the Allied effort with a brilliant if relentless propaganda campaign, a successful fund-raising effort, and a ruthlessly efficient drive to stamp out war profiteering in the state. Although he won widespread praise for his wartime work, Insull was obliged to neglect his companies during those years. By 1919 he found some of them struggling because of strains imposed by the war.26 During the war a political movement gained momentum in Illinois to strip the newly created State Public Utility Commission of its regulatory powers and return them to local authorities in the guise of “home rule.” As wartime costs spiraled, utilities found themselves squeezed and pleaded for rate increases that were long delayed or not granted. By January 1919 no fewer than seventy-one transportation companies had gone into receivership, with many others not far behind. The political imbroglio over rates and service affected Insull’s companies in different ways. Commonwealth Edison, PSCNI, and Middle West Utilities got through the troubles unscathed, but the elevated railway companies floundered badly, and Peoples Gas stood at the brink of collapse.


Egypt by Matthew Firestone

call centre, clean water, credit crunch, friendly fire, haute cuisine, Khartoum Gordon, Right to Buy, spice trade, sustainable-tourism, Thales and the olive presses, trade route, urban sprawl, young professional

In peak season (much of winter and all public holidays), there’s no best time to visit as the museum heaves with visitors throughout the day; lunchtime and late afternoons can be a little quieter. There are several queues to brave before entering, which in peak season can start to form an hour before opening time. At busy periods, the fivefold admission procedure is as painfully slow as it sounds: queue near the gate to pass through a metal detector and have your bags X-rayed queue at the booth to your right to buy a ticket queue at the cloakroom on the left to leave bags, cameras and videos queue at the automatic ticket barriers to enter the building queue inside for a second metal detector and have your bags searched again. Note that the Royal Mummy Room (adult/student E£100/50, tickets from museum upper fl, beside Room 50; 9am-6.20pm) closes before the rest of the museum. Official guides can usually be found near the gate or after the cloakroom and will take you around for upwards of E£60 per hour.

If you’re seeking an unspoilt beach experience, you’re better off heading to El Alamein, Sidi Abdel Rahman, or Marsa Matruh, too. Women should note that at everywhere but the beaches owned by Western hotels, modesty prevails and covering up when swimming is recommend – wear a baggy T-shirt and shorts over your swimsuit. Mamoura Beach (Map), about 1km east of Montazah, is one of the better city beaches, with a few small waves rolling in. Local authorities are trying to keep this suburb exclusive by charging everyone who enters the area E£3.25, with a further fee of E£8 to get onto the sand, but it’s still jammed during high season. There’s a much less crowded private beach with nice frond-type umbrellas, at E£41 per person or E£80 for a family. To get there, flag down an Aboukir-bound microbus along the Corniche and let the driver know you want Mamoura.


The Empire Project: The Rise and Fall of the British World-System, 1830–1970 by John Darwin

anti-communist, banking crisis, Bretton Woods, British Empire, capital controls, cognitive bias, colonial rule, Corn Laws, European colonialism, floating exchange rates, full employment, imperial preference, Joseph Schumpeter, Khartoum Gordon, Kickstarter, labour mobility, land tenure, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, Mahatma Gandhi, Monroe Doctrine, new economy, New Urbanism, open economy, railway mania, reserve currency, Right to Buy, rising living standards, Scientific racism, South China Sea, the market place, The Wealth of Nations by Adam Smith, trade route, transaction costs, transcontinental railway, undersea cable

In India, British merchants were usually partners in one of the ‘agency houses’ to be found in Calcutta and Madras, whose original purpose had been to remit home the earnings (one might almost say ‘winnings’) of the East India Company's ‘servants’. Agency houses dealt with imports and exports but also acted as bankers to Europeans working in India and managed plantations and processing plants (in jute or indigo) for their European owners. Agency houses spread from India into Burma and other parts of Southeast Asia in the first half of the century. When direct British trade with China (and the right to buy tea) ceased to be an East India Company monopoly after 1833, British houses (with Jardine Matheson in the van) were quickly set up there.45 This furious commercial activity had created by mid-century a worldwide network of international business centred on Liverpool, Glasgow and, above all, London. The extension of trade brought with it shipping, insurance and banking, managed and financed by allied mercantile interests or by the merchants themselves.

The first resident Protestant missionary in China had been Robert Morison, who was sent to Canton in 1807 by the London Missionary Society.72 But the real missionary–king of the China coast was the anglicised German Karl (Charles) Gutzlaff. Gutzlaff had gone first to the Dutch East Indies where he made contact with Chinese traders whose junks still carried much of the commerce of Southeast Asia. In 1831, he made the hazardous journey up the China coast (then forbidden to European travellers) as far north as Tientsin, the port for Peking, and ingratiated himself with the local authorities by his medical skills. By the time he returned to Macao (to which European traders were required to withdraw at the end of the trading season in Canton), he had acquired a wider knowledge of contemporary China and Chinese than any other Westerner, and a brimming faith in the scope for conversion. His Journal of Three Voyages along the Coast of China (1834) was a sensation. A Gutzlaff Association was formed.


Wealth and Poverty of Nations by David S. Landes

"Robert Solow", Admiral Zheng, affirmative action, agricultural Revolution, Atahualpa, Ayatollah Khomeini, Bartolomé de las Casas, British Empire, business cycle, Cape to Cairo, clean water, colonial rule, Columbian Exchange, computer age, David Ricardo: comparative advantage, deindustrialization, deskilling, European colonialism, Fellow of the Royal Society, financial intermediation, Francisco Pizarro, germ theory of disease, glass ceiling, illegal immigration, income inequality, Index librorum prohibitorum, interchangeable parts, invention of agriculture, invention of movable type, invisible hand, Isaac Newton, James Watt: steam engine, John Harrison: Longitude, joint-stock company, Just-in-time delivery, Kenneth Arrow, land tenure, lateral thinking, mass immigration, Mexican peso crisis / tequila crisis, MITM: man-in-the-middle, Monroe Doctrine, Murano, Venice glass, new economy, New Urbanism, North Sea oil, out of africa, passive investing, Paul Erdős, Paul Samuelson, Philip Mirowski, rent-seeking, Right to Buy, Scramble for Africa, Simon Kuznets, South China Sea, spice trade, spinning jenny, The Wealth of Nations by Adam Smith, trade route, transaction costs, transatlantic slave trade, Vilfredo Pareto, zero-sum game

H a b a k k u k ' s classic American and British Technology: t h e high cost o f unskilled labor p u s h e d the A m e r i c a n s t o p u r s u e t e c h n o l o g i c a l innovation; b u t t h e n , h o w explain r a p i d g r o w t h ? T h e a n s w e r : i m m i g r a t i o n . 320 T H E WEALTH AND POVERTY OF NATIONS about granted indemnity to squatters, which only encouraged the prac­ tice; and then in 1 8 4 1 a general "pre-emption" law made squatting legal and gave the occupant the right to buy his holding at the mini­ mum price. A big exception was made to encourage railway construction. New lines were granted land along the right-of-way, and these in turn sought generally to sell them to independent farmers. These were pre­ ferred, not because they were more lovable, but because they generated more freight than ranchers. In the last analysis, nature had its say: as one went west and rainfall diminished, more o f the land went in large tracts for livestock and herding.

On the other side o f the peninsula, after planting themselves at Madras, the English moved north into the Bay o f Bengal and the val­ ley of the Hugli River. There, beginning in 1 6 9 0 , they built their own commercial city on the territory of a tiny village called Calcutta. The key was the purchase in 1698 of a kind of "feudal" privilege (zamindari rights of tax collection). These rights, though flouted at first by local authorities resentful of European intrusion, were increasingly honored as Indian merchants and officials came to depend on English trade, assistance, and goodwill. In all of this, the name of the game was buying interested friendship and collaboration. Begin with the big merchants and the courtiers of the Great Moghul. G o on to local agents and feudatories, who looked 2 153 GOLCONDA to the English for gifts (bribes) and stipends, shipped export goods in their vessels, and in some instances even invested with them.


The power broker : Robert Moses and the fall of New York by Caro, Robert A

Albert Einstein, American Society of Civil Engineers: Report Card, bank run, British Empire, card file, centre right, East Village, friendly fire, ghettoisation, hiring and firing, housing crisis, Internet Archive, invisible hand, Isaac Newton, land reform, Ralph Waldo Emerson, rent control, Right to Buy, The Death and Life of Great American Cities, urban decay, urban planning, urban renewal, working poor, Works Progress Administration, young professional

But it did not have the power. So under the "Joint Program," the Port Authority agreed to pay for the construction of the bridge— under a contract which said that although the Port Authority would pay for it, the Authority would have nothing else to say about it. The Triborough Authority would lease the great span from the Port Authority, operate it, maintain it and control it absolutely—and would have the right to buy it as soon as it had accumulated enough cash to do so. Moses would, in other words, be building the bridge with his erstwhile rival's money—which would leave him with the money to build another bridge, the Throgs Neck. To get the Narrows Bridge built, moreover, the Port Authority had to give up another bridge that it had been anxious to build; it had to allocate for the Narrows span the money it had been planning to spend on the 125th Street span, and formally agree to "defer" that span indefinitely.

But, apparently tagged on as an afterthought, there was another paragraph: "The . . . Commission shall have power to improve, maintain and use the lands of the municipalities adjoining the parks and parkways of the Commission, with the consent of the local authorities having jurisdiction thereof." The paragraph appeared innocent enough. Since the commission was operating in Nassau and Suffolk counties, what legislator would stop to consider that some lands on Long Island might be owned by New York City and that, once the act was passed, the Long Island State Park Commission would not need the consent of Long Island officials to use that land because "the local authorities having jurisdiction thereof" would not be Long Island officials but New York City officials? Once the act was passed, Moses would be able to use the city's water-supply properties despite the objections of the municipalities in which those properties were located.