Monday 18 July 2011

Lessons from Crisis

By James Hallwood of the Fabian Society

The crisis News International has created is unprecedented, but it isn’t unparalleled. The abuse of power by unaccountable big business, reckless and corrupt practice and a Parliament that for too long was enthralled by its allure rings as true for News International as it did for the banking crisis. Four years on can we honestly say the banks have learnt their lesson? They remain unbroken, the bonuses are back and they’re slowly regaining the influence over Parliament they once held. We have an opportunity to learn from past mistakes. Not just those of the corporations but the failure of government and indeed our own collective individual failures that have contributed to this latest crisis.

If these crises can teach us anything it is that light-touch self-regulation does not work. Just as the banks were allowed to get away with malpractice so too was a blind eye turned to the behaviour of News International. For some Tories, Orangebookers and Blairites this was a question of ideology, of rolling back the state. But in a liberal democracy all power must be accountable. A sovereign Parliament should be the ultimate power, legitimised and accountable because of its election. It is therefore its duty to ensure that the unelected but hugely powerful are accountable to Parliament and thus the people.

Power was perhaps the reason that so many held back from interfering with the banks or the press. There was an ingrained culture that held that big business and the Murdoch press were essential for electoral victory. Some merely kept quiet while others actively courted them. There was almost a sense that these bodies were more powerful than Parliament itself, that taking them on would be futile and potentially disastrous. With its infiltration of the police and civil service I cannot doubt that some MPs were silenced by blackmail or worse still payment. Parliament must learn to regulate better but perhaps more importantly actually be aware of its own power. The banks and Murdoch failed, the public were outraged, and Parliament stepped in. The myth that big business trumped Parliament’s power was exposed, our MPs must never forget the lesson and responsibility that this gives them.

The proposals to break up the banks seem to have remained such. Ed Miliband’s own campaign to break-up Murdoch’s media hegemony must not be allowed to fail. The lesson for business is clear: monopolies and lack of accountability incite malpractice and encourage a sense of invincibility that sooner or later will be revealed as false. Far from stifling competition sometimes government must encourage it, never is this truer than with our press. This scandal provides an opportunity to rebalance our media, making it more plural and rewarding the publications that respect the law. News International will be the paradigm of pride before a fall in business, a lesson for all. The very real anger at the banking scandals seemed to come to nothing. We must harness our shock now and use it to legislate for a better and more accountable system.

We must also look to ourselves. We can’t sit back and feel happy enough to blame Parliament, the banks, News International, when so many of us to varying degrees have played our part in these crises. Just as our demand for endless credit, cheap goods and property contributed to the banking crisis so too have so many of us played our part in Murdoch’s empire. The huge popularity of his papers has been because of the demand for gossip and scandal. Stories that have torn people’s lives apart but have been voraciously read. How many have decried Murdoch but paid their monthly subscription to Sky? Make no mistake, we are not the perpetrators, but we have at times been complicit. As consumers and as citizens we have the power to change the poisonous culture that has infected Parliament and society at large. Personal responsibility when replicated en masse can make a huge difference. Just look at Liverpool where, following Hillsborough, you’d be hard-pressed to buy a copy of what they call ‘the Scum’ in any decent newsagents.

I haven’t given up on a fresh approach to the banks but time is ticking. Meanwhile a cleaning up of our press and the culture that’s gone with it is surely best achieved while the hammer is still hot. There are lessons to be learnt from how we dealt with the last crisis, lets then hope that Parliament, business and we as individuals try and act upon them. Culture is far harder to change than procedures; this is a one-off chance to make a change we desperately need, let’s get it right this time.

James Hallwood is an Events Manager at the Fabian Society

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