19/01/2012 Newsnight


19/01/2012

Newsnight with Jeremy Paxman asks what are the initiatives and rules that would form David Cameron's vision of 'popular capitalism'? We speak to Marxist historian Eric Hobsbawm.


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Transcript


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The market is the best imaginable force for improving human wealth

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and happiness, according to our Prime Minister today. It just needs

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a little adjustment. And it's not just him, it is all the main party

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leaders. They don't buy it at the protest

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camp, but how has this mainstream consensus been built, and can it

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last? I have been speaking to the Marxist historian, Eric Hobsbawm.

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Capitalism developed a sort of pathological degeneration of the

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admit Smith's line, in which you believe that responsibility had

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absolutely nothing to do with it. The question for our guests: if

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capitalism is so broken, why is an alternative so very hard to

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imagine? The story of how the British

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Government betrayed this man when he tried to warn them that tax-

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payers' money was being given to companies accused of money

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laundering. I don't know how else to put it, at some point or the

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other I will have to pay the price for what I have done.

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What do you mean? Retribution. There will be some form of

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retribution. The Most Excellent Order of the

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British Empire, to receive the honour of Knighthood. Calls mount

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for the man who shredded the royal bank of Scotland to be striped of

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his Knighthood. Since when has incompetence within an offence, and

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since when could jailbirds keep their peerages.

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Both the Prime Minister and the leader of the opposition spent

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today arguing for a socially responsible version of capitalism.

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They follow ed the Deputy Prime Minister, who is a fan of what he

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calls a John Lewis-style of economy. The days of an ideolgical divide

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are gone. The de bait now is just how the market works. The voices

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saying that even if you put lipstick on a pig it is still a pig

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are muted or ignored. Our economics editor, Paul Mason, reports.

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Today, if we're frank, many people are questioning, not just how and

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when we will recover, but they are questioning the whole way in which

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our economy works. The Occupy protest at St Paul's may be facing

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its final days, but its legacy could be this, both Labour and the

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Conservatives vying with each other to verbally beat up capitalism.

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Yesterday, unemployment rose again, and across Europe...With

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speechwriter recruited from the Guardian, and an audience from the

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Co-op movement, Mr Cameron weighed in. No true Conservative has a

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niave belief that all politics and politicians have to do is just

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stand back and let capitalism rip. We know there is every difference

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in the world between a market that works and the one that does not.

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Markets can fail. Uncontrolled globalisation can slide into

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monopolisation, sweeping aside the small, the personal, the local. But

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we are the party that understands how to make capitalism work. Across

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London, it was the turn of Labour to wave the red flag against

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irresponsible capitalism. challenge to David Cameron is to be

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judged on his deeds not his words. So, if he's serious about tackling

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irresponsible capitalism, he needs to clampdown on the fact that train

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companies are ripping people off. If he's serious about tackling

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irresponsible capitalism, he needs to take action to break up the

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rigged energy market. If he's serious about irresponsible

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capitalism, he needs to take action to stop those exorbitant bank

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charges. That is the proof that he is really serious about this agenda.

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The drivers of discontent are clear, a million young people on the dole,

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wages stagnant, growth shuddering to a halt, millions shut out of the

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credit market. But what does all the rhetoric about capitalism

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really mean. If by capitalism we mean the concentration of wealth,

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power and influence, among a few rich people in place like the City

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of London, nobody in mainstream politics, in truth, intends to do

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much about that. One reason might be, the absence of alternatives

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Over the past 18 months, the UK Uncut movement, has pushed issues

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like corporate tax avoidance and inequality into the headlines. This

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woman, a veteran of those protests, at the age of 26, is notm prised

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with the concept of -- impressed with the concept of responsible

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capitalism. When politicians like David Cameron and Ed Milliband set

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up these strange die cots me of responsible and irresponsible

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capitalism I just don't believe it, there are systemic issues with

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capitalism. Your movement avoids the systemic issues, because there

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is no alternative coming out of your movement? It is not our

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responsibility to come up with the alternative. It is the

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responsibility of UK Uncut and Occupy, to put pressure on

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Governments to deliver fairer and more progressive and more people-

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centered society. The reason we elect politicians is so they can

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come up with cold, hard alternatives, of which there are

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many. But, among the high towers of high

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finance, not many people can see an alternative, even if they can see

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major flaws in the current system. At the Financial Times, they are

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running a debate entitled "Capitalism in crisis". For all the

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column pages filled, the solutions are remarkably thin.

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Can you see any alternative view, as in the 30s, when there is a big

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inflection point in economic thinking, is anything emerging?

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the moment the answer is no. There are two sorts of reasons for that.

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First Minister, there is no equivalent of communism, nobody

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believes in a fundamentally different system. We have to

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remember the 30s, many people z most intelligent people believed

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that there was that sort of alternative. We are not getting the

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sort of Keynsian revolution, even within mainstream politics, we are

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going back to Keynsian revolution. The most unconventional thinking is

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Keynsianism, that is an 80-year-old system. The answer is, no. We are

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seeing demonstrations on the scale of the 30s, and strikes and trouble.

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Could the ultimate strength of modern capitalism be, that even

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those on the streets can't imagine it ever ending. 20 or 30 years ago,

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a young activist on the left, like you, would have just said I'm a

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socialist, why is that so hard now? Well, I do consider myself a

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socialist, and sometimes I do baulk at saying it, because I think

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people of my age have been conditioned, I suppose, by things

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like the Cold War, and by Stalin to see socialism as this kind of

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monolithic state control over the very tiny minute new shy of your

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life. For me, publicly-owned services means everybody puts their

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money in the pot, so everybody has stake in the services and ensures

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the purpose of the services is to make sure everybody is cared for,

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and not to make profits for a few people at the top. Which is what is

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happening in a lot of industries at the moment.

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Capitalism, irresponsible or not, has become global, complex and

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high-tech. The actions of national Governments limited by financial

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reality, whatever their rhetoric implies. Even the rhetoric, these

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days, ain't what it used to be. At almost any point in the 20th

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century you could have found influential figures offering an

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alternative analysis to the idea now common place in all three

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political parties, that there is nothing intrinsically wrong with

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capitalism, it is just a matter of how it operates. According to

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Marxist interpretation, selfishness and inequality aren't an abhoration,

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but the natural product of capitalism.

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Marxists aren't quite on the endangered species yet, the oldman

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of Marxism, Eric Hobsbawm, published a book, How To Change The

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World, at the age of 94. I went to speak to him earlier.

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The Prime Minister was speaking today about responsible capitalism,

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do you think such a thing exists? As an economic system, capitalism

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has nothing to do with responsibility. It has to do with

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growth, with making profit. Over the last 40 years, it seems to me,

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capitalism developed a sort of pathological degeneration of the

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Adam Smith's line, in which you believe that responsibility had

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absolutely nothing to do with it, because all good results, such as

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they were, would arise from operations of the free market,

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provided the free market were left completely free. What's really

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talking about is just capitalism, isn't he. The idea that capitalism

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can exist, alongside some sort of social, moral system, in which

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there is a degree of equity? It can, if it is made to. By itself, there

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is nothing to make it function like that at all. Why is it, do you

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think, that when we see capitalism clearly in crisis, in the west now,

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why is it that no-one else is reaching for these Marxist utopian

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solutions? Marxism isn't a utopian solution. Marxism is a definition

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of problems, which we have to deal with, and with which capitalism

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cannot, at present deal. The major problem, at the moment, which is

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going to be very, very hard for anybody to deal with, is that what

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was the transformation of the world through capitalism, and high-

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technology, and enormous extraordinary advance, one element

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of production has become surplus to requirement. Namely people. If we

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go on developing, what happens to the people who previously managed

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to get in on the system, largely through getting jobs, getting good

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living jobs, bad living jobs, but jobs? We can see some of the

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problems right now in detrialised areas. What happens, particularly -

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- deindustrialised areas, what happens, in particular to the men,

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when there are no jobs. When you look at the riots last summer, do

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you think they have a political element to them? I think the riots

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were a reaction to a society of demoralised people, that doesn't

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know what happens. These particular riots weren't, I think,

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particularly political, and it would be a mistake to read that

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into it. But, the fact that a large number of people are demoralised

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because there is nothing for them to do, is more than the temporary

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phenomenon of unemployment. Once upon a time, 80% of the population

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in the world were farmers. And that's the only way we could get

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the food. Nowadays we can get all the food we want, with maybe 2% or

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less of people farming. Now this is happening with the other parts of

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production too. That's where the real danger lies. So what do you

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make of the Occupy movement? interesting thing is the response.

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The response both on the part of ordinary people, to see that this

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extraordinary inquay ee quality, social and economic -- inequality,

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social and economic inequality, is in some sense seen as a moral

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inequality in most cases, is intolerable. The idea that even

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among the capitalists, that this isn't what they were supposed to be

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producing. To that extent, the lack of self-confidence in capitalism at

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the moment is one element that we have to count into the crisis.

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You're just an old Marxist clutching at straws aren't you?

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not clutching any straws, because I'm pessimistic. I doubt whether,

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in fact, a solution will be found. Evently no doubt t will be. I

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suspect we are looking forward to a rather stormy period in the next

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20-30 years. Thank you very much. With us now are the Labour MP, and

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historian, Mr Hunt, Eamonn Fingleton from the times, and Julie

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Meyer, founder and CEO of the investment company.

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Why are all the party leaders talking suddenly about responsible

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capitalism? Because when there is so little growth people think about

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fairness. They think about weather what

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people are getting out is related to what is going in. It doesn't

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occur to them in the good times? is less of an issue. When

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capitalism is producing a lot, people are getting a lot out. They

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don't worry how other people are doing, if they are doing better

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than them. What do you make of the talk? When we are beginning to see

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the bonuses come out of the City, there is a very real sense of the

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inequality of the system. What is interesting, in a sense, this

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debate has only begun at such intensity now, when we have had the

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ramifications of it for the last three years. It is getting very

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interesting. It seems to me that the perameters of the debate are

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centre left and progressive. About how we remodel the neo-liberal

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capitalist model we have had for the last 30 years. For those of us

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on the left it is a very exciting time. Do you think there is a

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crisis in capitalism? I don't F we mean capitalism as a market economy,

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where profit is the motive, you have to drive things to

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profitability. You can't tax a loss, you tax a profit, in order to have

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money for public service, you have tob to have profitability as the

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goal. What we have seen over the past 30 years capital markets have

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lifted a million people out of poverty. They continue to do that.

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If you speak to people in their 20s they take it for grant in their

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lives that they have the freedom to engage in the market. We're the

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market. You can't say there is something wrong with the freedom to

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pursue your livelihood, every day. The capitalist model lefting people

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out of poverty in Brazil, in China, in India, is very different to what

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we have here in western Europe. The point about capitalism is it has

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these many manifestations, capitalism changes over time. The

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great achievement of Marx was to hissor size capitalism, and put it

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:16:45.:16:48.

in -- historicalise capitalism and put it into history. The Soviet

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Union in the end. These are trivial and as if siel points about a

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historian's record that you -- facile points about a historian's

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record. It was true and that was the thrust of his career, and the

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Soviet Union ends up in a position where it couldn't print off the

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paper to write down the people it was executing. It was debating

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points about capitalism. It is about trying to identify the

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alternative, when you heard criticisms about capitalism, some

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of which are true, I didn't understand what Eric Hobsbawm's

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solution, when he did it was a catastrophic one. It is Germaine,

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you can't say capitalism is in crisis or has to be replaced, go

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and sit outside St Paul's, and ask what do you propose instead, say it

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is childish to ask. There are bad people in the world, we will never

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get rid of them. I personally think it is 5%, not 50% of the people. We

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live in a world where capitalism, market economy reflects human

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nature, we can't change that. We can only encourage positive

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behaviour. We will never, ever, in the history of the world, change

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the fact is there will be bad people who try to rip people off.

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When you talk about this being an exciting time to be on the left,

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there isn't any alternative that most of us can see being canvased

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anywhere? There is not an alternative in the sense of are we

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going back to the Marxist model of socialism of the 1850s, and the

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reason that is not going to happen is because we have lost faith.

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Socialism ultimately is an act of faith. Any place it was implemented

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it was an abject failure? models of socialism that were

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implemented were very different to Marxist thinking. The point of this

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is we were discussing earlier. me a favour. The interwar years. We

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were discussing in some of the contributions, the progressives of

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the 1890s and the 1900s, the way you tackle inheritance tax and

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inequality those are the centre left arguments. That is where David

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Cameron, the ultimate PR man who has very little structured beliefs

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can see where the debate is going, and wants to be there. The PR man

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doesn't sit with the childish sixth form debating point you made

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earlier. You are misunderstanding what people think about fairness.

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They think of fairness as putting something in and getting something

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out. A fair exchange, no robbery, the market accords well with the

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idea of that fairness. When the markets fail, as they have done,

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and where they see people taking out outsize rewards not related to

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their input, they begin to ask right questions, and they require

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reform. There has never been a socialist alternative to property

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rights and exchange. Nor has there been a socialist idea of fairness

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that challenges the idea that you put in and get out. That is why

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socialism intellectually has been a failure, not in the 1850s, but in

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the 1950s and the 1990s. This is a charicature of socialism, we had

:19:53.:20:00.

strong elements of socialism in the British society in the 1940s, 50,

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60s, some were strofpblgt the welfare state is an achievement of

:20:03.:20:10.

socialism. It is an achievement of Lloyd George, Churchill and

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Bevanage. It is a socialist achievement, most people would

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regard it as the same. This is fine territory to discuss it. We are

:20:19.:20:24.

seeing a failure of the City model of the last 15, 20 years, I

:20:24.:20:27.

represent Stoke-on-Trent, you go and see ministers today, and

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Treasury civil servants today, they are still in hock to the

:20:30.:20:32.

traditional City interests. There is no programme from this

:20:32.:20:36.

Government on manufacturing or industry. When people express

:20:36.:20:40.

objections to capitalism, it is always focused on people in the

:20:40.:20:45.

financial institutions, it is not focused on James Dyson or Richard

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Branson? It is true in this country our industrial policy is

:20:49.:20:52.

concentrated too much on the financial sector. The financial

:20:52.:20:56.

services sector should be a service sector to industry. It should back

:20:56.:21:00.

the industrialists of the day. For all of the people who want to get

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upset about the size of City bonuses. It should be noted you pay

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62% of that away. But the point is, really you have to be creating

:21:12.:21:16.

wealth, and all of society benefits from that. It is not about the

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bankers, it is about backing the industrialists. The point today

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about it being a moral mechanism too, do you believe it is a moral

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mechanism? Absolutely, I think it is the moral mechanism, to give me

:21:26.:21:30.

the freedom to choose to live my life the way I do. If I want to

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work 80 hours a week, choose my livelihood. What is more moral than

:21:35.:21:39.

to allow me to do. That what is not moral is if all of the people

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occupying St Paul's Cathedral, angry at the bankers' bonuses could

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see the wastage in Government. There is no evidence that

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Government is an efficient steward of our money. That is where they

:21:51.:21:55.

should turn their anger. efficiency a moral good in itself?

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If dupls down to my money and how the Government -- if it comes down

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to my money and how the Government spend it, it should be very moral.

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When it comes down to you and your friends undermining a great deal of

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the real economy with real jobs and mortgages and businesses who over.

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We drive money into the revenues of the financial coffers of this

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country. �4.8 -- 4.8 million SMEs, I'm an entrepeneur not banker.

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couldn't do it properly, we are all clearing up. This is why the state,

:22:32.:22:38.

Government had to step in. 6% of businesses create 50% of new jobs.

:22:38.:22:42.

You are talking about this moral point that David Cameron made, that

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the market in itself was a moral mechanism? It can be. In a sort of

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beautiful Adam Smithian world were the butcher, the baker and the

:22:54.:23:03.

candle stick maker are having a lovely relationship. The way to be

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moral is to regulate it. You have wicked and evil people. Without

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property rights and exchange people starve to date. -- death. You know,

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for my father, who came here from a Soviet prison camp, Brent Cross

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shopping centre is a moral institution. Being able to feed

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your family is a moral institution, so I just don't accept the argument

:23:26.:23:29.

that there is some socialist alternative to that. If you haven't

:23:29.:23:34.

got an alternative to that, we simply end up arguing about how to

:23:34.:23:37.

regulate capitalism, to ensure it acts in the interests of all. Of

:23:37.:23:41.

course there have been failings. But I still don't understand what

:23:41.:23:47.

your alternative is to either the elevated rhetoric level or the

:23:48.:23:51.

prosaic level to capitalism. fine with that debate, I do not

:23:51.:23:55.

believe, I lack faith, I can't move from the king dom of necessity to

:23:55.:24:01.

the king dom of freedom. I'm in favour of the market, it is how you

:24:01.:24:04.

regulate it. Can you trust this Government, Prime Minister, son of

:24:04.:24:11.

a stock broker. Come on, you speak as an MP of a party whose leader

:24:11.:24:15.

talked about a golden age of parliament. It funds the party, can

:24:15.:24:23.

you trust them to sort out this mess. You are quoting Eng les and

:24:23.:24:29.

Marx and attacking sons of stock brokers doesn't get you very far as

:24:29.:24:33.

a Labour Party. Certainly not with the young people. This country need

:24:33.:24:36.

to hear be jealous of people who work hard and make money. That is

:24:36.:24:40.

not what we need young people to hear. This is really about the size

:24:40.:24:45.

of the state, what we should try for an alternative, just for an

:24:45.:24:51.

experiment, try the Laufer Curve, people should pay a lot of tax. How

:24:51.:24:58.

do you increase tax, you drop the percentage, you optimise tax, not

:24:58.:25:05.

putting it up, you up it. It is a continuum. You pay 15% if you are

:25:05.:25:10.

very, very rich f you work and do the right thing you have to pay 25-

:25:10.:25:16.

30%. The problem is Art Laufer drew the graph on a napkirpbgs there was

:25:16.:25:20.

a reason, he hasn't data points, we don't know where we are on the

:25:20.:25:26.

curve. It is a continuum. We are talking mechanics here. Can

:25:26.:25:30.

you imagine, within any of your lifetimes, any of our lifetimes,

:25:30.:25:37.

some sort of alternative philosophy. You say it is a great time to be on

:25:37.:25:41.

the left. Is there going to be some sort of alternative, seriously

:25:41.:25:45.

canvased to a moderated market mechanism? What we have to do is

:25:45.:25:49.

move away from the traditional shareholder model. Nick Clegg's

:25:49.:25:53.

speech was very interesting, employee-ownership, John Lewis

:25:53.:26:02.

model, co-operate co-optives. I don't think the Conservative Party

:26:02.:26:07.

is anywhere near of it. It is the circle partnership, taking over

:26:07.:26:12.

failed NHS hospitals by giving employee ownership to circle

:26:12.:26:15.

partnership to revolutionise healthcare. He started with the

:26:15.:26:18.

principle that everybody has the right to great care. Those models

:26:18.:26:22.

are out there. Capitalism is changing as I call individual

:26:22.:26:25.

capitalism, it is not big business it is around the individual.

:26:25.:26:28.

have collapsed from the great rhetoric about capitalism a few

:26:28.:26:32.

minutes ago, into let's have some more mutuals and co-operatives,

:26:32.:26:35.

everyone is in favour of, that it is your imagination of the

:26:36.:26:40.

Conservative Party isn't. You can't imagine any kind of alternative

:26:41.:26:44.

philosophy? I'm still waiting. The attack on consumerism, which seems

:26:44.:26:54.

to me to look at the great history of pest lins and starvation and war.

:26:54.:26:58.

-- And shopping as the great social ill. That movement of consumerism

:26:58.:27:02.

has come up with no alternative to property rights, rule of law and

:27:02.:27:05.

fair exchange. What you are suggesting, all perfectly debatable,

:27:05.:27:09.

comes within that debate, but they are not an alternative.

:27:09.:27:14.

The secretary for international development has admitted to

:27:14.:27:18.

Newsnight that his department betrayed the name of an anti-

:27:18.:27:21.

corruption whistle-blower. The information was passed on to a

:27:21.:27:26.

private equity firm he had accused of investing in corrupt company. It

:27:26.:27:35.

was said to be an inadvertant error, and issued an apology,-to-the man,

:27:35.:27:37.

who was investigated by private investigators and his children

:27:37.:27:47.
:27:47.:27:49.

followed to school. Corruption is the curse of the

:27:49.:27:54.

developing world. In Nigeria corruption is seen as perpetuating

:27:54.:27:58.

poverty, violence and crime. Britain committed to help change

:27:58.:28:01.

things. This is what happened to man who warned the Government it

:28:01.:28:06.

may have been investing in corruption.

:28:06.:28:14.

Instead of investigating my report, the people who I accused, to place

:28:14.:28:18.

me on their investigation. The whole idea of protecting my

:28:18.:28:23.

confidentiality was thrown out of the window, right from the winning.

:28:23.:28:27.

Ology Oloko has just found out that every aspect of his own life, his

:28:27.:28:32.

birth in England, his education in businesses -- and businesses in

:28:32.:28:34.

Nigeria, has placed under investigation. He was secretly

:28:34.:28:39.

watched and photographed. That was just the start. They came to my

:28:39.:28:44.

house, take pictures of my family members, follow me to my children's

:28:44.:28:47.

school. What is that about? What do you think about following you to

:28:47.:28:52.

your children's school? I think I'm very, very upset about that, and

:28:52.:28:59.

very outraged about that. I cannot see the bearing, how that bears on

:28:59.:29:02.

my children. I can't see how any investigation into me, what has

:29:03.:29:07.

that got to do with my children, their school, their identity.

:29:07.:29:13.

had been worried that British tax- payers' money, intended to help

:29:13.:29:17.

Nigeria were he worked, was being invested in companies thought to be

:29:17.:29:24.

involved in money laundering. Three years ago, on a Christmas visit to

:29:24.:29:30.

Brighton, he took his concerns to a Government department, it was a

:29:30.:29:34.

brave step, according to his friend. It takes great courage to come

:29:34.:29:40.

forward and expose corruption in a country like Nigeria. The head of

:29:40.:29:44.

Nigeria's main investigative agency was forced into exile after being

:29:44.:29:48.

threatened with death, because he was probing corruption.

:29:48.:29:54.

So we're not talking about the cosy atmosphere of exposing something in

:29:55.:29:59.

Britain. We are talking about people putting their lives at risk.

:29:59.:30:02.

He knew this, and before presenting the dossier of allegations, he

:30:02.:30:06.

insisted they didn't pass on his identity. You have to understand, I

:30:07.:30:12.

knew I was putting myself at risk, and I made, I went to a lot of

:30:12.:30:19.

effort to try to protect my identity. To get assurances that my

:30:19.:30:23.

identity would be protected. Yet, it was leaked. At the root of what

:30:23.:30:28.

went wrong is the relationship between DFID, the department for

:30:28.:30:31.

aid, and its private enterprise arm, the Commonwealth Development

:30:31.:30:39.

Corporation, the CDC. Where DFID delivers aid for infrastructure,

:30:39.:30:42.

schools and hospitals, CDC puts money into private companies,

:30:42.:30:47.

aiming to build up a country's enterprise culture. In the past

:30:47.:30:54.

eight years CDC's assets have doubled to �2.7 billion T has

:30:54.:30:57.

achieved this financial success through private equity funds.

:30:57.:31:01.

Critics say that has meant big money for fund managers, but little

:31:01.:31:06.

for the intended beneficiaries, the world's poor. I think all of the

:31:06.:31:10.

evidence does suggest that CDC is not operating with anything like

:31:10.:31:16.

the proper oversight one would expect. It is, if you like, going

:31:16.:31:21.

rogue. Dotun Oloko was promised his identity would be kept secret, it

:31:21.:31:28.

wasn't, his dossier was handed by DFID, to the CDC, who handed it to

:31:28.:31:34.

the private equity firm whose investments he had questioned. Then

:31:34.:31:39.

capital partners, they boast of delivering returns to investors,

:31:39.:31:43.

including CDC, faced with the allegations, they told investors

:31:43.:31:49.

that he was mill illusionious and criminal, and they were --

:31:49.:31:53.

malicious, and criminal, they were hiring private investigators to

:31:53.:31:57.

uncover his motivations. The secret surveillance began, they captured

:31:57.:32:03.

him at his home, his children's school and church. In Nigeria they

:32:03.:32:07.

interviewed his school friends and colleagues. Everywhere Dotun Oloko

:32:08.:32:11.

was beyond reproach. There was no issues of reputational concern, he

:32:11.:32:16.

was described as a proud, principled, fun-loving and upright

:32:16.:32:19.

businessman. Meanwhile he himself was told by friends that questions

:32:19.:32:23.

were being asked. He suspected DFID, the development department, had

:32:23.:32:28.

leaked. But for over two years they denied it. The development

:32:28.:32:32.

secretary, Andrew Mitchell, told Dotun Oloko's MP, his allegations

:32:32.:32:37.

had been thoroughly investigated, concluding, that DFID had gone as

:32:38.:32:42.

far as it could. He hoped the extremely comprehensive response

:32:42.:32:46.

drew a line under the matter. has written me many letters where

:32:46.:32:50.

he has tried to draw a line under this, and saying he hoped it

:32:50.:32:53.

signals an end to the course pond dense. You say he should have known

:32:53.:32:58.

what was going on? He should have found out, and investigated it a

:32:58.:33:02.

lot more than he clearly did. Matters came to a head when Dotun

:33:02.:33:07.

Oloko was sent a copy of Control Risks's investigation report. Are

:33:07.:33:11.

you worried now? I was worried from the winning, now I'm even more

:33:11.:33:15.

worried and concerned. All my family members have now been

:33:15.:33:18.

dragged into it. This week, following Newsnight's inquiries,

:33:18.:33:23.

the development secretary changed his position. Offering an

:33:23.:33:30.

unreserved apology. He confirmed his department, DFID, had an

:33:30.:33:34.

advertantly passed on Oloko's original doss yes, unaware his name

:33:34.:33:38.

could be found in the electronic properties. He said there will be a

:33:38.:33:43.

full review of procedures. CDC say the same and apologise for the

:33:44.:33:50.

Harris rasment to him and his family. -- harassment to him and

:33:50.:33:54.

his family. They shudder raise the name, the first thing you do when

:33:54.:33:58.

you have a sensitive document. You don't send on original versions of

:33:58.:34:02.

sensitive documents. You should always get rid of the name. If you

:34:02.:34:07.

and I went to DFID, through a freedom of information request, and

:34:07.:34:12.

asked for e-mail correspondents, most of the names would be blacked

:34:12.:34:17.

out. They are well used to doing this. The question is, why, in this

:34:17.:34:22.

instance did they not go through that simple scrubbing procedure.

:34:22.:34:26.

When we were in Nigeria, just a few weeks ago, we found the kind of

:34:26.:34:31.

poverty the UK's aid is supposed to alleviate. What of that private

:34:31.:34:36.

equity firm, boatsing billions invested in nigh -- boasting

:34:36.:34:40.

billions invested into Nigeria, the people who set their investigators

:34:40.:34:48.

They needed to understand his underlying motivations, they said.

:34:48.:34:52.

In their words, they refute entirely his allegations about

:34:52.:34:56.

their investments. They add that while they know of no reason why Mr

:34:56.:34:59.

Oloko's life should be in danger, the company expresses its sincere

:35:00.:35:04.

concern for him, that he should feel that it is the case.

:35:04.:35:09.

I don't think DFID deserve to be called a development finance

:35:09.:35:13.

institution, or somebody that is helping the emerging countries.

:35:13.:35:18.

They are making the situation worse. Do you feel vulnerable? Very much

:35:18.:35:24.

so. I don't know how else to put it, at some point or the other I will

:35:24.:35:31.

have to pay the price for what I have done. What do you mean? Maybe

:35:31.:35:35.

some form of retribution. Dotun Oloko, the whistle-blower, whose

:35:35.:35:39.

cover was blown, says he's now fearful of going back to Nigeria.

:35:39.:35:44.

In his absence his businesses have collapsed, all he has left is his

:35:44.:35:46.

reputation. Established beyond doubt, by the private investigators

:35:46.:35:54.

who turned over his life. Poor Fred Goodwin, that is Fred

:35:54.:35:59.

"The Shred", the man awarded a Knighthood from the last Government,

:35:59.:36:05.

pour services to banking, faces having -- for services to banking,

:36:05.:36:11.

faces having it taken away or not. The Prime Minister has left it in

:36:11.:36:15.

the hands of civil servants, many of whom might have a going in the

:36:15.:36:20.

great British Hon Norse' system. For critics the extravagant title

:36:20.:36:24.

says it all, the grand cross of the order of the bath, the Knight

:36:24.:36:29.

commander of the order of St Michael and St George. The most

:36:29.:36:36.

noble order of the gart ter. JG Ballard put it, a system of

:36:36.:36:39.

antiquated medal that is belong on a Christmas tree. Whether you agree

:36:39.:36:44.

with the assessment or not, the Knighthood awarded to the former

:36:44.:36:47.

RBS chief, Fred Goodwin, for services to banking, has done

:36:47.:36:52.

little for the system's credibility. Today David Cameron welcomed news

:36:52.:36:56.

that MPs will consider stripping Sir Fred of his Knighthood, though

:36:56.:37:03.

he passed the buck on who should do it. There is a committee in terms

:37:03.:37:07.

of honours that exists, and will examine this issue. Obviously it

:37:07.:37:10.

will want to take into account the Financial Services Authority report,

:37:10.:37:15.

which I think is material, and important. Because of what it says

:37:15.:37:19.

about the failures at RBS and what went wrong, and who was responsible

:37:19.:37:22.

and all the rest of it. There was a committee, they should do the work,

:37:22.:37:27.

rather than the Prime Minister. it may not be that simple. The for

:37:27.:37:35.

theure committee normally only considers -- for fitture committee

:37:35.:37:40.

normally -- foregeture committee normally only considers those who

:37:40.:37:50.
:37:50.:37:50.

have been jailed. The boxer, Nasim Hamed, lost his

:37:50.:37:56.

MBE after a driving conviction. Yet Jeff free Archer is still in the

:37:56.:37:59.

House of Lords -- Jeffrey Archer is still in the House of Lords despite

:37:59.:38:03.

serving two years in jail for perjury. There have been many

:38:03.:38:11.

attempts to reform the honours over the years. Changing OBE from

:38:11.:38:15.

"empire" to "excellence" is as far as it goes. And clarity on when

:38:15.:38:20.

somebody should be striped of an honour should have to wait too. We

:38:21.:38:23.

are joined from Cambridge by Matthew Hancock, who has called for

:38:23.:38:28.

Sir Fred to lose his Knighthood. Here in the studio is the poet,

:38:28.:38:34.

Benjamin Zephaniah, who publicly turned down an OBE in 2003.

:38:34.:38:39.

Mr Han, incompetence, it -- Mr Hancock, incompetence isn't a crime,

:38:39.:38:45.

why should he lose his Knighthood? Sir Fred Goodwin was guilty of more

:38:45.:38:48.

than incompetence, it was recklessness at the helm of an

:38:48.:38:53.

institution, whose failure not only damaged it, but the entire economy.

:38:53.:38:59.

Recklessness also isn't a crime, is it? No, but if there is something

:39:00.:39:05.

that somebody has done, who has been bestowed one of these great

:39:05.:39:08.

honours, that have huge respect across the country by most people.

:39:08.:39:13.

That brings into it, as you said, into the package, into disrepute,

:39:13.:39:18.

the whole system. Of course it should be revoked. This has been

:39:18.:39:23.

done. It is not quite true what was in the package. It has been done on

:39:23.:39:28.

a number of occasions, for people who haven't been convicted of

:39:28.:39:35.

things, but who have obviously been inappropriate holders of such

:39:35.:39:39.

honours. Anthony Blunt, for instance, he was never convicted of

:39:39.:39:44.

being a spy, when he admitted to it. It was clear he wasn't the sort of

:39:44.:39:52.

person. Andrew Blunt a spy spy, Jeffrey Archer went to prison and

:39:52.:39:56.

still a peer? Whether someone has to leave the House of Lords, that

:39:56.:40:01.

is a seat in parliament. It is an honour? MPs who go to prison for

:40:01.:40:04.

more than 12 months automatically get kicked out, maybe the Lords

:40:04.:40:08.

should look at a similar sort of system. That is a question of a

:40:08.:40:12.

seat in parliament, we are talking about honours? That is exactly it,

:40:12.:40:17.

we are talking about Hon Norse, and Hon Norse, for the -- honours, for

:40:17.:40:21.

the system to work, honours need to reflect that someone is of high

:40:21.:40:25.

standing, has done excellent work, and has put something into society.

:40:25.:40:31.

This last discussion that you just had with Danny Finkelstein and

:40:31.:40:36.

Hobsbawm and others, it was all about the fact that as well as

:40:36.:40:40.

making money there is more to life, there is duty. As a society we

:40:40.:40:45.

recognise that in this honours system. Benjamin Zephaniah what do

:40:45.:40:48.

you think about Fred Goodwin's Knighthood? It should be taken away.

:40:48.:40:52.

Why? I think the whole honours system should be scrapped. It is

:40:52.:40:57.

not just poor old Fred. He got a Knighthood for services to banking.

:40:57.:41:03.

So some people recognise that he was doing great services to banking,

:41:03.:41:07.

they were all wrong too. If Fred should be punished, the people that

:41:07.:41:10.

nominated him and gave him references are also wrong. There is

:41:10.:41:15.

not much more we can take away from Gordon Brown, having taken away the

:41:15.:41:21.

Prime Ministership? I neen the system is flawed and -- I think the

:41:21.:41:25.

system is flawed and it reeks of corruption. Corruption is a strong

:41:25.:41:30.

word to use, every society hasg ongs it gives to people, doesn't

:41:31.:41:40.
:41:41.:41:41.

it? Yes it does. I rejected mine openly, I'm amazed at the amount of

:41:41.:41:45.

people who rejected their's quietly. There is lots of people in the

:41:45.:41:50.

country who don't give it the respect. Perhaps they are more

:41:50.:41:55.

discreet or better mannered than you? I'm being honest. I'm a poet,

:41:55.:42:01.

that throughout my life has been writing about slavery and empire

:42:02.:42:07.

and how empire impacted upon my people. It is a dam right cheek to

:42:07.:42:15.

have somebody then offer me a medal that is called "Order of the

:42:15.:42:19.

British empire". They have renamed it since, you were instrumental in

:42:19.:42:23.

getting it renamed, it is Order of the British excellence now?

:42:24.:42:29.

point is we have to acknowledge the great work people do in our country.

:42:29.:42:32.

Some fascinating people do really great things in our country. I

:42:32.:42:37.

think that the way we honour them should be divorced from state and

:42:37.:42:40.

monarchy. I have no problem with the monarchy or politician giving

:42:40.:42:45.

out an award, if they exist. But the award coming from the monarchy

:42:45.:42:50.

or state, that is where I have my problem. Mr Hancock, is there some

:42:50.:42:56.

other mechanism that could be devised, then, if Fred "The Shred"

:42:56.:43:04.

has made such a monkey out of it. Is there other mechanism -- #Isms

:43:04.:43:12.

there? I think there is, a group of -- mechanism there? I think there

:43:12.:43:16.

is. It is people like me and most in the country who think an

:43:16.:43:20.

honours' system to publicly thank people who have done good things

:43:20.:43:24.

for society, it is people like me who defend an honours system and

:43:24.:43:29.

promote it and think it is a good idea, who should also be keenest on

:43:29.:43:32.

taking away honours where they are obviously deeply inappropriate.

:43:32.:43:40.

That is why I think it is important that in the case of somebody like

:43:40.:43:46.

Fred Goodwin, who is a symbol of everything that went wrong in the

:43:46.:43:50.

financial crisis, that his should be taken away, because nobody likes

:43:50.:43:56.

the idea that he's still got a Knighthood, and there is lots of

:43:56.:44:00.

criticism that he was given one by the Labour Government. It is a

:44:00.:44:04.

classic political point that is made very often. It doesn't help

:44:04.:44:09.

the honours system, and other people, like certificate Henry

:44:10.:44:15.

Sasoon who just got an award. last word? I would like to ask you

:44:15.:44:21.

what you think of Jeffrey Archer's position, shouldn't he be derobeed?

:44:21.:44:25.

Because it's a seat in parliament, as well as. We're only talking

:44:25.:44:29.

about the title. The title goes with the seat in parliament. I said

:44:29.:44:34.

maybe that should be looked at it in the same way MPs get kicked out.

:44:34.:44:43.

We have to find a new modern way of biging up our people when they do

:44:43.:44:51.

great things. We have a great system. It turns the year 4 709,

:44:51.:44:55.

marking the Chinese new year, it is the Year of the Dragon w a series

:44:55.:45:05.
:45:05.:45:24.

-- We hit the buffers on my Of the enormous number of things

:45:24.:45:28.

made in the workshop of the world, this relationship between

:45:28.:45:34.

Government and citizen is surely one of the very, very oddest.

:45:34.:45:41.

A communist regime that feeds its citizens by satisfying western

:45:41.:45:45.

consumerist capitalism. But maybe, if you have enough to eat, not

:45:45.:45:52.

having a vote doesn't really matter. That's it, we will be back tomorrow.

:45:52.:45:57.

The film pioneer, cod dak, the company that invent -- Kodak, the

:45:57.:46:03.

company that invented the hand held camera have applied to take shelter

:46:03.:46:08.

from bankruptcy. It may be that Kodak became associated with happy

:46:08.:46:12.

memories, it was a well liked brand. This is one of their first

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advertisments. Good night.

:46:18.:46:23.

# Where are you going # My little one

:46:23.:46:28.

# Little one # Where are you going

:46:28.:46:33.

# My baby # My own

:46:33.:46:42.

# Turn around # You are one

:46:42.:46:49.

Newsnight with Jeremy Paxman asks what are the initiatives and rules that would form David Cameron's vision of "popular capitalism"? We examine the proposals and speak to the noted Marxist historian Eric Hobsbawm.

Also on the programme, we have an exclusive report from Peter Marshall involving a whistle-blower and the Department for International Development.


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