21/11/2012 Newsnight


In-depth investigation and analysis of the stories behind the day's headlines with Jeremy Paxman.

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Remember when this was the sort of thing that came to mind when


someone mentioned "banking". merely the servant of the bank, to


carry out the policy of the bank. Isn't that so? That's so, Sir, yes,


merely the servant. How the great and the good would


like to be able to make banking safe and dull again.


But how? You want to know about banking, talk to a Rothschild.


Could this really have been one of the last attacks on Gaza. We will


explore what the ceasefire means. Revolting students protest at the


cost of university education, but are fees actually remodelling ivory


towers into something of practical value?


And this was China at the weekend, not that they wanted us to know.


We talk to three Chinese writers will sow censorship works and how


they -- how censorship works and how they work around it.


TRANSLATION: In this system people worship authority.


worship authority. Night. As if we needed any


reminding of the mess we are in. It turned out today that last month


the country had to borrow �2.5 billion more than was necessary a


year ago. So goes the programme of reducing the debt. This morass was


created originally by a banking crisis, which has triggered a


wholesale loss of affection for banking in its turn. You may


perhaps know the feeling. If you have a banker in the family, it is


not quite up there for being outed for having Radovan Karadzic on your


Christmas card list, but the fear and loathing linger. A


parliamentary commission took evidence from the Chancellor today


on what might be done. We watched. The 18th century philosopher David


Hum e said politicians must think every man was supposed a knave.


Certain environment and groups create an atmosphere of greed and


selfishness, that might otherwise not be the case for individuals. He


said that as London was rapidly becoming the centre of the banking


world, with a reputation for honesty and probity, and the saying


"my word is my bond". Now that bond is severely damaged by 21st century


greed. None more so than the LIBOR scandal, where bankers willfully


manipulated a key interest rate, that may have affected even


mortgage rates. An all-powerful commission was established to look


at why some bankers behave in such a reckless way, and how it can be


mitigated. Today they were grilling the man who set up the commission.


I hoped this commission can look at other issues, like the standards we


expect of the profession and how, for example, in the medical


profession, or the teaching profession, we expect certain


standards, and those standards are you know administered by the


profession, often, but how we can create something similar in the


banking industry. But peers and MPs wanted to talk


about the actual laws being introduced by the Chancellor, aimed


at changing banking behaviour. Especially ring-fencing or the


partial separation of banks' high street operations from their


speculative investment banking division. The commission of worried


that banks could find a way to bore under any ring-fence. There is a


very clear objective in the bill. Which is is that the regulators and


the Government of the day can continue the provision of core


services in the banking industry, in the situation in which a bank is


failing. And that, I would say, is then absolutely a crucial objective,


which, by the way, my predecessor found himself unable to deliver.


The Chancellor, smarting from today's disappointing Government


borrowing figures, also warned the commission not to undo many of the


reforms which had already been agreed over the last two years.


Commission grandees didn't like that. You gave us the job of going


over the ground, and I suspect if you were sitting on this side of


the table you probably wouldn't take too kindly to a Chancellor or


Government minister saying, I want you to look at that, but not that,


and so on. I'm sure you will appreciate will we find it very


convincing to be told that we should be wary of unpicking a


consensus, you just something has achieved a consensus, it doesn't


make it right, it is our job to take a look at it. You would agree?


The LIBOR scandal may be the trigger for the latest probe, but


it was the slithery head of the latest snakes. We have seen banks


linked to drug cartels and banned transactions, we have seen


telephone salaries, fired executives with huge pay-offs and


bonuses for failure. Can the culture of greed ever been


pertained whilst pursuing a profit? I think it is very difficult to


actually turn knaves back into Knights, which is, in a sense, what


we want to do here. We want to reinstill bankers the sense of


public service, the sense that they are providing a service to the


community and they are not just in it purely for making enormous


bonuses or large sums of money. think you can, I think that we have


been through a period of great excess in the financial markets,


where the profit motive dominated everything. Clearly things have


changed. We have new regulation, and there is a new mind set out


there. The new COEs in some of the major banks, one of their first


tasks going to be to introduce a corporate culture which has much


higher ethical standards than we have seen in the past.


In order to work as an investment banker in the City of London, you


need to be accredited with the FSA, to show you are not a known


criminal, et cetera. But there is no ethical aspect to that license.


Unlike in the retail banking sector. So, if you are selling mortgages or


car loan, there is a far higher standard of proof and qualification


needed, than if you are trading billions of derivatives or complex


financial products, that could bring down an entire bank, or even,


in some cases, an economy. It took a former derivatives trader,


now an in coming Archbishop of Canterbury, to ask what many


outside the establishment were thinking. Surely the easiest way to


get lots of small banks is to break up the big ones, we might come back


to that on another occasion. Despite the decadence of recent


years, tough new rules are on their way to rein in bankers and banks.


Some things can't be regulated. The shadow banking sector, which


includes hedge funds, is worth a staggering $67 trillion worldwide.


$9 trillion in Britain alone. No amount of ethical change could


protect the global economy from a collapse of that magnitude.


Here in the studio now is Sir Evelyn Rothschild, from the most


famous banking family in the world, and John Moulton, and Jennifer


Moses, former executive at Goldman Sachs, and director of Agent


Provocateur. What has gone wrong with banking?


personally don't think anything has gone wrong, I just think it got out


of gear, due to many things. And if you want me to say so. JP Morgan


made a speech, or he wasn't alone, to Congress, in 1933, complaik


explaining a Select Committee that -- explaining a Select Committee


that bankers needed to behave in a correct manner if they were going


to carry out their duties. It is an interesting speech and something


which one should pay attention to, that was in 1933. The suggestion is,


that something has happened and it is about motivation? I think if you


take that point, if I may say so, no-one has commented on it, but


there is one thing that has transpired, that is technology.


Technology has played a huge part in changing people's attitudes to


banking. In the sense that traders are now quick in reaction, they


take views that don't necessarily think through, you have the example


of CityCorp, when you had silos, and one silo didn't know what the


other of doing, and people were taking action. The other point


which is very important, is that when day-to-day bankers saw that


their return was half the return of investment bankers, they decided


they should join up and do some of the investment banking work. What


do you think has gone wrong in the way banking works? I think it is


become too successful. We ended up with too few, large banks, many in


the UK, of course, owned overseas, which wasn't a situation


historically. You had distant owner, high leverage, and rapidly


increasing remuneration, as people tried to chase the investment


banking model. Things became far more complicated, and actually,


ethics did take more and more of a back seat. Jennifer Moses, do you


accept that ethics took a lower and lower place in the pecking order?


Well, I think it's, I think we have to note that there have been


financial panics, problems, ethical issues in banking, forever. This is


a cyclical problem. I'm not convinced there was a golden age in


which ethics and banks were perfect. But, I think what did happen is we


had, not just tech nol, but, frankly, democratisation of credit,


a lot more people had access to credit, and finance became a very,


very large part of the economy. Excuse me cutting across you, but


everyone is trying to work out looking forwards, how do you bring


some sense of order, morality, and minimised danger in future? There


are all sorts of ideas, there is an idea for a hypocratic oath for


bangers, and an idea of something like a General Medical Council for


bankers, are any of these ideas going to work, John Moul to n?


don't think they will work easily. You need to change the views of the


people -- -- change the people at the top. You need to change


remuneration, and make sure the organisations are not so powerful


that they encourage the arrogance, which encourages people to be


unethical. We reached a stage where, not so many years ago, suddenly


bankers became quit agrossive. If you said you weren't going -- quite


aggressive, if you said you weren't going to work with them, they


threatened to work with other people or they wouldn't support you.


That only arose in a world where there were relatively few banks and


they were very powerful. The big problem for tax-payers is some of


these banks can behave like this, the traders take all the risk, and


they know they will be bailed out by the taxpayer. How do we get to a


position where that will never happen again? The word "never"


happen again, is unlikely. We will hopefully have a better system.


What you have to be aware of is the increased amount of cash in bonus


hauls, given to bankers, rather than participating in the company


which they work. The loyalty factor disappeared. Because if you are


paid �50,000 a week, in cash, and then the next week you are paid by


someone else �75,000, you will depart. But if you have shares in


the business you are working in, and participation, that is a


different way of looking at things. That is something that should be


ruled in very strongly by the authorities.


The Chancellor says we need to get to a position where bad banks can


be allowed to fail. How do we get there? They shouldn't be allowed to


fail, it is the question of, we have had a...Why Shouldn't they be


allowed it fail? We should have proper regulation in supervision.


The supervision has to be well done. We have to pay the supervisers and


make them understand what they are doing. Supervision will


occasionally fail. We need to have more and smaller. That is really


the point. The Archbishop was making that point. He made the


point, and the answer came back that, we have got ring-fencing, you


can still have these big banks, but effectively running separate


division, will that work? Why would you bother. You have two operations


under a single holding company. The chances of one tunnelling to the


other, which is the phrase the Bank of England uses, is quite high. It


will be quite a big regulatory burden stopping them from


tunnelling across. If you just make them separate in the first place,


you don't need to worry about this ring-fencing. One of the things the


Chancellor hasn't done is decide where the line actually drops for


ring-fencing, which is rather vague. It is not clear where the line


should be. We need to make smaller banks, so they can be orderly wound


down. Forcibly split them up? might have to. Jennifer Moses, what


do you make of that idea, more banks, smaller? I think that is the


right idea. I think there is a tension between wanting to have


very successful banks that are big players on the international scene,


and the reality that the retail banking side was shovelling coal


into the furnace of the casino, and that became a tax-payers' problem,


and we can't have that again. I'm not sure changing compensation, the


horse is out of the barn already, that is happening. That is not


sufficient. We need more banks, we need to separate retail operations


so, they become, frankly, more of a utility. Then have a better


visibility around the risk-taking shadow banking sector as well. I


don't think "never" will happen. I'm sorry there is a delay on the


satellite, forgive me. What about the other deno mam number, the


banks can now get involved in -- phenomenon, the banks can now get


involved in all sorts of transfactions, they are funding


transactions that allow hedge funds 0 drive up the price of oil or food


or whatever, although they are making it possible, they are not


actually accountable for it. The mechanism is entirely clean? That


is a very good point. You mentioned the other financial instruments. It


is really unspeakable that it took so long to license hedge funds.


Hedge funds have been one of the most dangerous instruments in


modern times. They do not help the economy, they are not far different


from being bookmakers. They are funded by banks? They are, but they


act in a manner that is not constructive for the banks.


So the regulation is pointless, isn't it? Now they are regulated


and licensed. Not very much. In most jurisdictions, I fear. In


reality we need to make sure our retail banks don't fund the casino.


This crisis wasn't caused by the hedge funds. We are looking forward


to the question of how you regulate banking effectively, when so much


is done at arm's length, effectively, by the banks? You just


have to make sure that the high street bank, the retail, the


systemic bank, doesn't have large chunks of its capital exposed to


the casino world, the huj fund world. The hedge fund -- hedge fund


world. The hedge fund world is arguably dangerous and harmless, it


is a betting activity. It doesn't make a difference to the economy


unless it brings down things that matter when it fails. Where do you


think the next crisis will come from? I think the next crisis will


arise either in Europe, or in the current banking system, when the


LIBOR class claims come home. I agree.


Jennifer Moses, you have the last word, where do you think the next


crisis will come from? I actually think it is going to come from Asia.


Where I think we don't have very good visibility at all about the


banking system. So we don't know if the banks are well capitalise, if


they weren't corrupt. So I think that's where the growth and the


danger lies. Thank you all very much indeed.


For the last three-and-a-half hours, there has been a truce in Gaza and


Israel. Earlier there had been more of this.


Now, in the last eight days, Israel has killed an estimated 140


Palestinians and lost five of its own citizens. The truce was


announced by the Egyptians. But the American Secretary of State clearly


had a significant role in the agreement. Can this ceasefire last?


Mark Urban is here. How did news of the ceasefire come out? Of course,


for days we have had this business with the Egyptians and the


Palestinian factions saying it is imminent, any minute now. It does


seem it was necessary for the Americans to become engaged, with


Hillary Clinton, personally travelling to Israel yesterday to


deliver Benjimin Netanyahu, the Israeli Prime Minister, on this


deal. Therefore, when the announcement was made in Cairo, the


honours were done, jointly, by the Egyptian Foreign Minister and


Hillary Clinton. The people of this region deserve the chance to live


free from fear and violence and today's agreement is a step in the


right direction that we should build on. Now we have to focus on


reaching a durable outcome, that promotes regional stability, and


advances the security, dignity and legitimate aspirations of


Palestinians and Israelis alike. How did the ceasefire come about,


what was each side trying to gain? In a security sense, we saw them


going hammer and tongs in the last 36 hours, we saw the initial target


list of the Israelis, exclusively at first the rocket sites, turned


into something quite different. On the Palestinian side too, there was


escalation, perhaps to try to empower the negotiating process. A


bus bomb in Tel Aviv this morning. That is something that hasn't


happened for quite a while. Yesterday too firing another rocket


at Jerusalem. Very important symbolic target and showing that


new capability. From the Israeli side, the level of violence that


has been dished out from air and sea, and land, in the past 36 hours,


very intense. Symbolically attack significant targets. The national


Islamic bank, in the centre of Gaza City, an organisation set up by


Hamas to try get around various international sanctions put upon


them. Another key target very near the bank in Gaza City, the Civil


Administration Building, all sorts of administration goes on there,


particularly going into Israel. And symbolic from the Israeli point of


view. Infrastructure, a key bridge put in on the highway that connects


Gaza to the south of the Gaza strip, and the Egyptian border area, and


that border area, heavy bombing, on the smuggling tunnels, Israelis


would say trying to prevent reply with missile, but also damaging the


economy and wider community in gas za. So we don't get too -- Gaza. So


we don't get too carried away, is it likely to be permanent? Both


sides were seeking something that lasts not months or days, but years.


They are both trying to convince the wider world opinion that it was


unbowed and got the better deal. Hamas has stressed this evening,


that if this ceasefire period of 24-hours persists and is solid,


that border crossings will be open to Israel and Egypt, the siege in


their terms, will be broken. The Israelis from their side said they


didn't want a sticky plaster agreement, they wanted something


that gave accountability and monitoring. The accountability, all


sorts of other factions have fired hundreds of rockets into Israel


before this started, Hamas was saying, not us. They now see that


as being a situation where Hamas will be accountable. Monitoring by


outside forces the Egyptians, and possibly others. If you look in the


broader sweep, not just the past few weeks, the fascinating thing is


how far Israel's security position vis a vis dwaz za, has deteriorate


-- Gaza, has deteriorated. When they left before they were dealing


with bombs, rockets and firearms. Now they have cities in rocket


range, thousands of rockets into Gaza, hitting Tel Aviv, Hamas has


maintained the rocket fire throughout the eight days, despite


the intensity of the Israeli bombardment. Accountability,


perhaps the key point in awful this. Israel and Hamas do not recognise


one another in one sense. But now, Hamas is being asked to be


accountable. In that sense, Israel has given it that form of


recognition. Thousands of students milled


through the centre of London protesting, what they were


protesting about of rather lost in the shambles at the end of the


prosession. When, beard faced beard, anorack charged anorack, and


oranges were thrown. It is no question that university students


are having a tougher time of it than their parents had. Of course,


they don't like paying hefty fees. The bigger question is what the new


system of funding is doing to higher education, which raises the


familiar question, what is a university for? Vasily Grossman


went to today's rally. They are no longer protesting


against something that might happen, students in England face a new


reality. Higher fees are with us. And they are not universally


popular. A lot of my friends don't have


anything to look forward to once they graduate. It is such a


difficult climate to get a job, it's not fair having all that


burden of debt. There is a few schemes within the uni, to try to


ease it, but obviously it is tough. It is clear there is still plenty


of anger about the decision to increase tuition fees. Beyond that,


what has been the impact on the higher education sector as a whole.


For a start, let's look at student number, there were bre dictions


before the change came in, -- predictions before the change came


in, that we would see a massive dropping off in the numbers of


people going to university. If you lock at the graph t appears the


drop off has happened. But much of this is accounted for by many


students who would have come this year, foregoing their gap year and


starting their degrees last year to avoid the fees. Allow for this in


the graph for England where fees went up, it looks pretty similar to


that of Scotland and Wales who have their own systems of university


finance. So much for student numbers, what


about the composition of the university population. Has there


been, as some predicted, a massive drop in the numbers of students


from poorer backgrounds going to university? There are some


suggestions when you look at the applications this summer, it is


students from richer backgrounds, more prosperous socialy economic


backgrounds who have decided not to go to university. The numbers are


very small, so you can't read too much into it. Certainly it looks as


if students from poorer backgrounds are still going to university. That


is not what many people predicted. Of course, the Government put a lot


of work into making sure students from poorer backgrounds weren't put


off applying, with all sorts of help available. However, one study


of this help suggests that students won't know exactly what they will


qualify for, until they get well into their first term. Which seems


of limited value, if the purpose is to persuade them to apply in the


first place. Simon Hughes advised the Government on fair access. He


says we clearly have more work to do on this system. There is money


given, increasing amounts for scholarships, I'm trying to make


sure the decision is made by Government to move it from


scholarship for fees or living costs, so scholarships for living


costs F we can get that message across, there will be help for


youngsters who need it, with living costs, you don't worry about the


fees unless you are earning and it will come out of your salary. Then


we will have really broken the back of the issue. Some universities are


actually offering less help for poorer students. If we divide


universities into five groups, with the most prestigious on the left,


here is the help they offered last year and here is the help this year.


The higher up the pecking order, the more is being done. Another


thing that we can say has changed are the kinds of courses that


students are opting for. For vocational courses like


medicine, dentistry, engineering, physical science and law, have only


seen small declines in applications from last year. However, the big


hit has been taken by courses that less obviously lead to a job, like


creative arts and design, social studies, and non-European languages.


Each suffering a double-digit drop. Blunt low, the universities that


are -- bluntly, the universities that are not delivering courses


that do well for students. Where the student feedback says it is not


well taught or the buildings aren't good, and they don't get enough


seminars or lecture, those courses are go. The finances of


universities will not, in the end, be able to fund, courses that


aren't seen to be good by the people going to them.


Politically determined that these protestors won't get near


parliament, however, -- police are determined that protestors won't


get near parliament. MPs will say victimisation was not the plan. The


purpose of increasing tuition fees was to shore up the future of


higher education funding. In that context, how successful have the


changes been. If we look at the projections for university finance


going forward, this line shows what the Government is putting in,


falling off rapidly. But this is more than offset by the rise in


fees, and the increase in foreign students. On paper, this all looks


healthy enough. But it is dependant on keeping enrolment stable. And


that the Government doesn't put more barriers in the way of foreign


students. Clearly, it is a very difficult


issue, with the immigrations and visa reforms going on at the moment.


It is something we are acutely aware of, that we need to make sure


we have a coherent policy in terms it of immigration in international


students, I'm not sure that is the case at the moment. These students


have clearly made up their minds about I hooer fees, and we can't --


higher fees, and can he can't getting students to relish paying


more. Although it is early days, we are appearing to see the start of


reevaluation of university as a choifplts some deciding to change -


- choice. Some deciding to change what they are studying and some not


going at all. My guests are we me.


-- my guests join me now. Alice Swift is a student on the


marched today. What is wrong with the reevaluation


of what universities are for today? I don't think anyone would deny


that universities need to be incrementalally added to. What are


you against? The fundamental overhaul of universities. It is one


of the asset of the country. It is one of the finest things around the


world regarded that Britain does. It should be overhauled in new


economic circumstances is undeniable, the Government hasn't


set out to do that. From the moment the Brown review was published and


the White Paper, the Government was talking about a fundamental,


radical shake-up of education in England. It seems to many people


inside of universities, that is a very imprudent thing to do, in an


era where the universities have never been more important to the


knowledge economy, and our competitive advantages have never


been more difficult to obtain, to fundamentally overhaul one of the


best things we have. This is an epitaf you have for your


Government? I took the evidence on committee. I wish Howard was there.


He's getting stuck on language. The reality is students are at the


heart of the system. That is a God thing. That means that stew -- good


thing. That means students are able to compare and contrast which


courses are right for them. More engagment with employers, not just


business, third sector, service sector, with business. Before I


finish. The old system, if you are earning �21,000 today, you would


pay �470 a month back. Under the new system, if you earn over


�21,000, you start paying. If you earn �22,000, you pay �90 a year.


There is so much misinformation about the fees. There is less


concern about fees being paid back than what it is doing to


universities, what is your job? Director of Employer Engagment.


What does that mean? We are looking all the time at how employers are


involved in the relevance of what students are learning. We are


working with employers on co- creation of courses to make sure we


are meeting the needs of employers. You are churning out a work force


for them? We would regard in our education that we are providing is


so much more than just equipping them for their work. But they have


knowledge, the ability to think creativity, critically, an


litically, work in teams. That is what stew -- Anwar that litically.


-- analytically. That is what students want? Yes, but the way the


education system is now being made to be beholding to the market is


very dangerous. Why? At the University of Birmingham, loads of


departments that are seen as something that can't contribute to


the dictate of a market economy, things like archaeology,


antiquities, sociology, all of these subjects are very much under


threat. They are not beholding to the markets. Is that not because


students don't want to study them? No that is not it. How are they


under threat? In the University of Birmingham there are threats to


close these departments down as we speak. If lots of students wanted


to study the subjects and pay the fees, I suspect they will be kept


aon? Lots of students want to study the subjects, sociology, the


University of Birmingham has tried to close sociology down, when there


is a huge demand for sociology, that is why it can't close it down.


Perhaps you could engage with that? If the University of Birmingham is


closing down courses where there is massive demand there is something


wrong at the university. I don't think that is happening. If you


look at the evidence, and we saw it in the programme, the Russell Group


University, this is the same in America, where you see place like


Harvard do well in attracting students from lower socialy


demographic backgrounds into their -- socialy demographic backgrounds


into their sources. That is happening with the Russell Group


Universities. We will monitor this thing. If you are saying the market


is a bad thing because employers, the third sector and the service


sector engage with universities, that is a good thing.


University of Birmingham have departments beholden to fossil fuel


companies, and teach such a wide variety of oil--based practices, in


30 years time what do we do when we reach a climate catastrophe, the


market works on short-termism, and it doesn't consider these aspects,


we are beholden to it, the whole regime. There is a question about


the broader social context. Frankly, I don't want to be rude, what is


the point of people paying their taxes, and you are, what, early


modern intellectual history aren't you, a subject most of us don't


really understand. Why should the taxpayer support that sort of


activity? There is a huge range of answers to that question. The


public, market face of the university is crucially important,


but what universities fundamentally do. What is your contribution to


the market? I'm here discussing it with the programme. You are not


getting paid much for this, I will tell you? As a matter of fact, the


project which I direct at the Oxford University has raised $2.5


million of American money. If you are asking for a direct


contribution to the market, there you have it. This is more money I'm


going to make in a very substantial fraction of my career, OK. But if


you are asking a more general question, which I presume you are,


which is about why every modern, western, prosperous, democratic


country, for the last 50 years, has supported a publicly subsidised


university system, then there are all kinds of reasons for that.


There is the fact that a democratic quality depends on an educated


electorate, and innovation is fundamentallinessry for the economy.


There is the fact that our cultural industries as well, very vital and


an important part of our economy, depend directly on universities.


Come on? But the really extraordinary thing, this is


something that hasn't been picked up in the media, this is the first


time, in modern history, that a publicly-funded university system


has been eliminated with the stroke of a pen. It is not a stroke of the


pen, students don't want to study a lot of these subjects? Jo that is


not true. In every other -- That is not true. In every other country, a


university system exists directly funded by tax-payers' money.


England has just done something that is radical and unprecedented.


Which is to remove, overnight, at the stroke of a pen, the direct


funding of universities. I would like to make the point about


innovation. It is essential to our economy that we innovate. We have


just done a study through our Think And Do Tang, at Birmingham


University, showing the enormous value of design and education to


our economy in the Midlands. This is all about encouraging radical


innovation and lateral thoughts. Probably the sort of things that


come very natural in your sort of area. I don't think it is one or


the other. Do you think he's a luxury? No, I don't. Do you think


society is, in any way, harmed, if as, let as say for the sake of


argument, that Alice is right, let's say certain subjects stop


being caught in universities. It doesn't matter if it is ark kolg or


something else. But something that is -- archaeology, or something


else, does society suffer with that? It is about understanding


where the value is of these different subjects. I would say


society does suffer, absolutely. Why? Because education is a public


good, it is a social good, and it can't be beholden to whatever the


short-term prospects of the market. That is in your assertion.


doesn't need to be a trade-off. We don't needing to purely market-


driven. The evidence does seem to suggest that students are voting


with their feet? Some are, some of the very successful universities


will continue to subsidise courses that they think are for the social


good. They are good things to have in a society. There is nothing


wrong with that. Do you think it matters then that fewer people wish


to study non-European languages? think it matters that we make sure


that there is enough courses, enough diversity, in the economy,


so there is choice for everyone. That is not what your system is


allowing to happen. This is fundamentally important point, the


ascendant economies in the world are not in Europe. If we want to


engage with the ascendant economies in the world we have to maintain a


capacity to teach young people non- European languages. If the market


signals seem to be suggesting to student that this is not a


profitable activity, then we are dealing with market failure. The


market signal are failing to convince students to study things


we desperately need. Can I make a more general point. Be quick.


real point is, although engaging directly with the market is one of


the very important things that universities do, really,


fundamental, crucial and unique things that universities do,


staying way back from the short- term cycle of journalism and


politics and business, engaging people's minds with the really big


problems. We're entering a century in which we are being faced by the


most enormous problems, it is vitally important that universities


not be swallow up by the short- termism of the political cycle on


the one hand or the economic one on the other. Thank you very much all.


In China, hundreds of activists have rallied to the defence of a


blogger, who made the mistake of making a joke about the Communist


Party Congress, which has just closed. It wasn't very funny, I


won't trouble you with it. The Congress is supposed to have mapped


out a bold new future for China. What happens to people who have the


temerity to think outside the orthodoxy, will provide a very


early test of whether the country is really taking a new direction.


From Beijing, Paul Mason reports on writers who work under a repressive


The Chinese invented writing, paper and the printed book. But from the


early days of pen and paper, there were also pioneers of censorship,


book-burning and propaganda. Today, many Chinese novelists and


historians are seeing their work censored or simply banned. I have


been speaking to three of them. About what it is like to have your


thoughts suppressed. In this village of 800 people, a


dozen blood collection stations Yan Lainke's novel, the The Dream


of Da, ne Village, is the true story of an AIDS epidemic that


happened when the Government encouraged people to sell their


blood to get rich. Blood banks opened in the village market, the


village crossroads, and the empty rooms of private homes. They even


opened up in converted cow sheds. Throughout the village, blood


filled plastic tubing, hung like vines. And bottles of plasma, like


plump, red grapes. Everywhere you looked there were broken glass


vials and syringes, discarded cotton bud, used needles and


splashes of congealed blood. All day long the air was filled


with the stench of fresh blood. Yan's novel about the scandal was


published in China, but disappeared after three days. It is now banned


there. TRANSLATION: In China today, one type of writing that is deemed


unacceptable, is when a writer looks too closely at China's


reality. Another kind of writing that is unacceptable here is,


writing that brings back to life moments in China's history that are


supposed to be forgotten. Also, if a piece of writing is too


imaginative, then it is also deemed not suitable for readers. It is for


these three reasons that books are seen as controversial, or are


consistently banned. The dream of the village does not just show a


scandal, it shows how mania can take hold in a place where one


party is determined to force the pace of growth. TRANSLATION: At the


beginning of the 90s, the whole country needed to develop very


quickly. Everywhere needed money. We must acknowledge that the people


who sold blood were organised by the Government to do this. More


importantly though, the environment at the time in China ignited


people's desires and people's inner darkness. People desired money,


they needed money, they earned money, they went crazy about


becoming rich, and so they sold their blood. China's new leaders


have come to power, pledging a crackdown on corruption.


But the book-buying public are ahead of them, Chinese readers are


devouring crime novel, with stories of official skullduggery, by the


million. I felt as though a heavy stone were


pressing on my chest, choking off my breath. The boulder was


corruption itself, and everyone who hated and fought it was cisofice.


This man's crime novel, The civil Servant's Notebook, tells the story


of bureaucrats selling their soulss and losing their minds in the


system. TRANSLATION: In China we have a very bad tradition, in this


system people worship authority. Worshiping authority has become


part of our way of thinking, our way of life. Like a religion. To


give up a way of thinking, a way of life, a religion, is very difficult.


Whout challenge, the boulder of corruption would grow larger and


larger, someone would need to continue to role the boulder up the


hill, even though it was bound to roll back down every time. So long


as we persisted, we might find a new meaning within our lonely,


painful, absurd and despairing lives.


In real life, the author was a civil servant, and his real-life


boss was sentenced to death for gambling away $3.6 million of the


public's money in the casinos. The book has not been banned, but in


the wake of the Boshili scandal, China's most prominent scandal for


decades, he fears a book like this would not be published today.


TRANSLATION: I think the system creates officials like Boshli, one


may have fallen, but if the system does not change, there will be L


iOS hili, Xianshili and Maoshili. The background to the censorship is


rising discontent. These pictures, shot on Saturday in one of the


provinces, and uploaded secretly to the internet, show thousands of


demonstrators and police vans overturned. The spark, a police car


chase that injured bystanders, the underlying issue, corruption.


It's not just the present that exercises China's censures, one of


their key obsession -- censors, one of their key observations is the


past. None so much about Mao's overthrow, triggering one of the


biggest famines in history. Homes were dismantled, and woks, basins


and bowls were requisitioned. Grain supplies were centralised. By the


summer of 1959, the famine was intense. Yang Jisheng's book, Tomb


stone, has sold half a million copies on the black market. It is


acclaimed in the English version, but it can't be published


officially in China itself. TRANSLATION: Tombstone has four


levels, one is to remember my father, the second is a tombstone


to the 36 million Chinese people who starved to death. The third is


a tombstone for the system that caused the familiar anyone, the


fourth is a tombstone for myself, if anything happens to me, writing


this book has put me at risk, politically.


Yang, a veteran journalist for the state news agency, spent years


secretly compiling data on the familiar anyone, whose cause and


scale were denied then by the propaganda, and still are denied by


the Communist Party today. TRANSLATION: The basic reason why


tens of millions starved to death was, totalitarianism, in this type


of system, once a calamity occurs, ordinary people have no means of


saving themselves. TRANSLATION: During the Great Leap Forward, I


was active in the communist youth league, when my father died of


starvation, I thought it was something just happening to my


family. I thought his death was my fault. Because I hadn't gone home


to pick wild plants for him. Only later I discovered that it wasn't


just a provincial problem or local problem, it certainly wasn't just


my family's problem, it was a national problem. I'm still a party


member. Although now I think communist is a fantasy. I do


believe the party wants to do good for the people and the workers. I


want to speak for the people, that is why I'm still a party member.


We know Chinese culture is a mixture of the ancient and new. If


China's people could read their own great modern literature, it would


be richer still. But the new is controversial, and the Government


has no intention of freeing it up right now. What's happening in


Chinese literature is important, because it mirrors what is


happening on the internet, and in millions of private conversations.


There's a parallel universe of ideas out there, just waiting to be


expressed in the open. TRANSLATION: My aim is to speak the truth. To


act honestly and to be a real person. A writer should constantly


pursue the truth. I want to tell my readers what really happened.


regime in history has managed to suppress its own literature forever.


But China's leaders intend to give it a go. Whether they succeed


depend, in large part, on the power of writing.


Paul Mason, we must have talked too much earlier, I'm told that's all


much earlier, I'm told that's all we have time for. Good night.


Good evening. We have more atrocious weather for Thursday.


More very heavy rain falling another inch or two of rain in


areas completely saturated already. The likes of south-west Scotland,


western Scotland, we have an amber warning out here. Across parts of


the south-west of England. And Wales too. Southern Wales, it is


where we have seen the most serious flooding this week. We could see


another inch or two of rain. Damaging gusts of wind. 50-60 miles


an hour inland, 70 miles an hour in the coast. With the ground so


saturated could bring the trees down. After the rush hour, with the


rain across Northern Ireland and the winds t eases some what into


the afternoon, and before it clears the potential for snow across the


Scottish mountains wet weather into northern England and the afternoon.


It looks largely dry in the south and east, that said the winds get


strong into the afternoon, that gives problems for the wind itself


in the rush house across the home counties and the south-east of


England. It looks pretty miserable with heavy rain on Thursday, a


dryer day across the northern half of the UK on industry. Showers


around, after a chilly start. A slightly dryer day for some parts


of southern Britain as well. But the rain slow to clear from the


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