Jemima Khan’s father, Sir James Goldsmith, was always fond of his son-in-law, the Pakistani cricketer-turned-popular leader, Imran Khan.
It is unfortunate that he is not around today to witness the recent surge in Imran’s popularity to a point where he is seen to be leading the race to form the next government. Luckily, JG has left a fully formed manifesto for Imran in his little known (outside France i.e., where it was a bestseller) book called ‘The Trap’. That this book is almost forgotten is a tragedy of our times for it presents a staggeringly astute analysis of free markets, the misconceived notions they are based on and what they do to society. At the same time, it offers eminently sensible solutions to these problems. Written twenty years ago, it predicts not only the Greek crisis and the London riots but also the expanding divide between the rich and poor in general and what horrific results it will yield. The sheer audacity with which JG, a billionaire himself, has taken on the high priests of economics as well as the dominant views of his time is nothing short of astonishing. Perhaps only someone as successful as him could have this much confidence to take on powerful orthodoxies on so many fronts.
While Imran is appreciative of the advice that Goldsmith provides in his book this little volume could be valuable reading for all third world governments confronted with a global hegemony of neoliberal ideas. If nothing else, the latter would do well to take the following three lessons from JG’s masterpiece:
First, they should disregard the dominant discourse privileging economic growth over everything else. GDP can increase even as the country is going down the tubes. Indeed, epidemics (which lead to more economic activity in the pharmaceutical industry), more spending on private security, breakup of the family institution due to economic imperatives, elimination of subsistence farming, can all go on to increase GDP. In Pakistan’s case, the Musharraf years, in which measures such as GDP growth rate (helped by fudging inflation rates), increase in stock prices (with hardly any new listings!), penetration of mobile phones, and a housing bubble were all held up as evidence of a booming economy, destroyed the country’s social fabric as well as its long-term competitiveness.
In the absence of a strong state that ensures equitable growth, preservation of valued local and community institutions, and welfare of the people, GDP growth is often achieved at the expense of social stability. The economy, as JG pointed out, “is a tool to serve us. It is not a demi-god to be served by society.” In the UK, JG points out, despite growth in GNP of 97 percent between 1961 and 1991, the number of those living in poverty doubled to 11.4 million. Similarly, France’s impressive GNP growth of 80% between 1970s and 90s increased unemployment from 420,000 people to 5.1 million.
Secondly, JG would have advised developing countries to stay clear of economists pushing for free-trade. Having made much of his money from cross-border investments JG knew what he was talking about. While free trade would make a lot of things cheaper for a country’s population, it would also turn their country into a shop rather than a factory. Its people would lose jobs and become uprooted from their lands. In fact, in a global cash economy, all production would flow to where the purchasing power is, with no guarantees of fair returns for the producers. For Pakistan, he would have advised stricter as opposed to lax controls on foreign investment (including forcing investors to build factories and create net employment) and the formation of regional trading blocks rather than trading with highly developed countries. In JG’s view, it was the elite in developing countries that pushed for free trade while the poor resisted it.
Nowhere is the mismatch between the people’s lives and free-trade imperatives more starkly represented than in agriculture. It was the profit imperative, according to JG, not the milk of human kindness that had been driving the world towards intensive farming. In JG’s book, poor countries such as Pakistan do not stand to benefit from mechanization or intensification of agriculture. They need to rely instead on labour-intensive farming that did not drive the redundant agricultural labour to cities. At the same time, they must avoid genetically modified seeds or artificial fertilizer and pesticides all of which came with promises to increase yield but lead to indebted farmers, soil depletion and a host of other problems.
Perhaps most illuminating were JG’s views on the welfare state, a cornerstone of Imran’s vision for Pakistan. Always balancing his idealism with a healthy dose of pragmatism, JG recognized that given increasing populations and higher costs, a welfare state could not go on sustaining the load of an entire country. His solution was once again to preserve tradition over imperatives of modernity. Institutions such as family or community, he maintained, must be preserved and encouraged to share the state’s work in helping the community. Social capital, in other words, is essential to maintaining a stable and healthy society. Most education, healthcare, even justice must be delivered locally, and democratic representation ensured in these institutions. It was, he argued, only by strengthening the people, and making them independent, that the state could be held accountable.
Jimmy Goldsmith’s ideas were in stark contrast to the dominant neoliberal discourse of his day. Unlike other radicals, however, he did not denounce capitalism, but simply provided some prudent suggestions on how to tame it to serve the people. But his vision was not one where the people were left to the whims of the market, or the private sector. Stringent regulations were imposed on the market and on all trade to ensure that it was the people who benefited.
The third world apart, even Cameron and Miliband could do worse than to go back to JG’s little book. Benevolent or responsible capitalism is not a matter of cutting bonuses, altering shareholders’ rights or changing the way vocational skills are imparted. It requires a shift in values and priorities, a renewed focus on people rather than profits and a rejection of the neoliberal economic dogma that is destabilizing this society. Anything short of that, as Jimmy Goldsmith would have put it, is just shifting chairs on the deck of the Titanic.
