It’s all wrong

April 13, 2010

I have written nothing on this blog for over a month while I try to think through the logic of financial sector reform in the wake of the global financial crisis. Frankly, I haven’t got very far. I am not sufficiently knowledgeable about the detailed systemic workings of contemporary banks and ‘shadow banks’ (the bits, like brokers and pension funds, that cause bank-like problems without being banks) to be able to offer a clear blueprint.

Today, however, I was reading some of the now declassified material surrounding a policy choice by the United States government that was clear, decisive and hugely beneficial to tens of millions of people. This was the decision at the end of the Second World War to confiscate all rented farmland in defeated Japan, and to redistribute it to actual cultivators. Reading the original memorandum that led to the policy, one is struck by the extraordinary simplicity and clarity of the thinking: here are the lesser interventions we could attempt – most obviously tenancy reform – and here is why, though such interventions seem superficially tempting and easier, they will either change nothing or make the situation worse. Here is the case for a radical intervention (expropriation). Here is how it can be achieved and the valuation mechanism that will make the process affordable to the Japanese government (offering some small compensation to landlords). And that, of course, is what the US and the new post-war Japanese government did. They changed the institutional terms under which Japanese agriculture, and half the country’s population, operated, setting the stage for the most remarkable developmental story the world has seen (more remarkable than anything we have yet observed in China).

I mention this because reading a memorandum about an effective policy intervention reminds me that I can state a case about financial reform without spelling out every detail. The logic is the same as with the Japanese example for no other reason than that the case for radical change in finance is now just as compelling, and the likelihood that lesser interventions will achieve nothing or worse is just as great. In essence, financial reform requires its own act of expropriation: we have to take away from bankers, shadow bankers, and other speculators all money which they can play with in the current financial system but do not stand to lose because of explicit and implicit government guarantees.

Martin Wolf in The Financial Times (here and here and here, though possibly not if you do not have a subscription) thinks this is impossible because the financial system is too complex. His colleague at The FT, John Kay, thinks that it is possible if you hive off the most core ‘core’ of finance – the so-called ‘payments system’ – and restrict that bit of banking to buying only government securities with the retail deposits it takes in. This of course leaves huge chunks of finance – including things like mortgages – outside of what Kay and others call ‘narrow banking’, the little bit that under Kay’s proposals government would explicitly guarantee.

Japanese land reform makes me think that one should be able to do something more practical and far-reaching than what Kay proposes, given the political will. The counter to Wolf’s arguments is simply that finance is whatever politicians make it; they can rewrite the rules as they like. This, though we have forgotten it, is why we have politicians. And this means that the objective of separating speculative from non-speculative money is feasible.

In the UK, where the government already owns most of the retail banking sector, I would force all core banks to become mutuals (building societies), owned by their members. This is the appropriate form of ownership for the core, boring, low-cost bank activities, which should serve the needs of customers rather than third-party investors. These mutuals would take in government-guaranteed deposits which they would use as the float we employ to make regular payments, to finance mortgages on first homes, to provide working capital to business, and to purchase government securities — all within bands set by the Bank of England. The central bank would hence have a somewhat expanded mandate, giving core banks modestly changing limits for the amount of treasuries they could hold, the minimum business lending they had to do, and their mortgage lending range. This would not be finance by bureaucratic dictat because the Bank of England would be acting within its own limits and because the core mutuals would not provide all mortgages, all business finance, or buy all government debt. But people would use the mutuals because their deposits were guaranteed and credit would tend to be cheaper because the assets and guarantees behind it would tend to be better than outside the mutuals.

In effect, individual citizens would have a certain amount of core mutual ‘entitlement’ and would be encouraged, through voting, to set the agenda and objectives of their mutual. One role of the mutual part of the financial system would be to address the welfare needs which private bankers claim have been supported by private sector bank deregulation – they mean by this access to more mortgage lending for poorer people. Government would probably mandate the Bank of England to force the mutuals to lend a certain amount of their money to poorer people who maintain long-term exclusive accounts and (in a financial sense) behave themselves, such that they could borrow in excess of normal loan multiples to buy first properties. Separately, the mutuals would probably also offer some forms of ‘plain vanilla’, low(er) yield pension products that might be given capital guarantees – contraversial – or some other advantage, say preference in the allocation of government debt or legally-mandated first dibs on private sector initial public offerings (IPOs).

None of this would reduce risk outside the core banking field, indeed it might well increase it. Not to worry: more frequent, more limited collapses among non-guaranteed financial institutions would almost certainly be a good thing. When a crisis occurred, it would – unlike today – be possible to bankrupt the institution in question and send a clear message to people about the risk associated with investing in ‘the real world’. This would be possible, of course, because there finally would be a real world, instead of the unified Never-Never Land that global finance has become since the demise of clear regulation, beginning in the early 1970s. We would all have our building society account, and our other uninsured investments, and no one could be in any doubt about which was which. The system, I suspect, would also be fantastic for competition because it would allow lighter-touch regulation of uninsured financial institutions. My feeling is that politicians are far too keen at present to put the boot into hedge fund managers, who are a real font of new ideas (compared with bankers), because it is so much easier than changing an economy’s overarching ‘financial architecture’.

None of the above will happen, because it would need another World War with 50 million dead to make it happen (which brings us back to Japanese land reform). But it would still, I think, be the right thing to do and hence is worth discussing. Of course there are lots of problems with what I have outlined, not least finding a new, workable balance between the mutual and uninsured financial sectors.  Any thoughts on how to address such issues would be gratefully received.

Related items of note:

Paul Krugman suggests that the financial reform package in the US is likely to be so lame that it is best to boycott it.

http://www.nytimes.com/2010/03/01/opinion/01krugman.html

Roger Alcaly, in the NYRB, reminds us that a lot of hedge fund managers (like him) are much nicer and more intelligent than a lot of bankers, with the best review of the mechanics of the crisis I have seen.

http://www.nybooks.com/articles/archives/2010/mar/25/how-they-killed-the-economy/

The manifesto of the British Conservative party for the 6 May 2010 election is full of bluster about mutual-style organisations, as are other party proposals. But no one I am aware of is proposing that a core banking system be restricted to mutuals, which would be a significant policy.

http://www.guardian.co.uk/politics/2010/apr/12/conservative-manifesto-cameron-power-people

We should not forget the fiscal travesty in our financial system – the fact that interest on debt is tax deductible for business where dividends on equity are not. In essence, this provides a fiscal/legal guarantee of acute over-indebtedness at some point in every economic cycle. Various people have mentioned the fiscal issue in the past year (Martin Wolf, Clive Crook, someone at The Economist, me on this blog, me in a Mr. Angry letter to The FT). Unfortunately the tendency among the journalists is to drop the point down to the eighth paragraph (hard to avoid when no politician will even speak about the question). Still, the fiscal thing ought to be written about in its own right.

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Fade away and radiate

February 21, 2010

To San Martino di Castrozza for what northern Italians call una settimana bianca or ‘a white week’. In fact, this is the white week, the week of carnevale when northern Italian schools shut for a ski break and everyone grabs the three official days of public holiday and adds to them the inevitable ponte of two more days which takes them to the weekend, allowing for nine consecutive workless days. At the lift where ski school meets, we overhear a woman asking her friend if her husband is working this week. The response is as if the dumbest question in the history of the world has been asked: ‘But of course not, this is white week.’ Even if Italy sinks back into the Third World, its holiday arrangements will remain forever sacrosanct.

I have to leave white week early to give a talk in Florida. But this isn’t so bad because I already had three Sundays skiing at our local Umbrian mini-mountain, Monte Nerone. Despite living 45 minutes away for eight years, this is the first year we have been. There is just a single button lift, but it is quite long and gives access to two good pistes of about 800 metres. Better still, the place is run by very nice people. My son was initially undone by a pair of skis from the sales that are almost twice as long as the ones he used the year before. I could do little to help him because, as part of my ongoing mid-life crisis, I started using a snowboard when I hit 40. So one of the young lift operators put on his skis and spent two hours teaching Luca. Not the kind of thing that happens in your average ski resort. And, after all that, there is a decent enough rifugio at the bottom of the pistes which serves pasta at Euro7 a plate. Given that there is a web camera overlooking the bottom of the pistes which allows you to see exactly how much snow there is in real time, and given that you can wake up and arrive after a fresh snowfall to find there are only 10 other skiers at 10am, it is a pretty good deal. Adults pay Euro18 per day, children Euro10; the lift is only open on weekends when there is sufficient, natural snow. Amazingly enough, the place has been operating since 1969.

Florida is not quite like Umbria. I arrive via New York, which is very deep in snow and very white and beautiful from the air. Florida is unseasonably cold too. Landing in America there is the usual double-take at the number of very fat people. And then arriving in Orlando, there is the supplemental double-take at the number of old people and the number of trousers with elasticated waistbands. Ten minutes in Orlando and you begin to think that Italians have found the Holy Grail itself with their determination to maintain an attractive outward appearance. I take a cab to the 750-rooom hotel with its obligatory man-made lakes, two golf courses, jogging trails and written warnings not to ‘jog alone’. Reckless as ever, I complete a run on my own and live to tell the tale.

The talk I have to give is to a group of people who definitely do not originate in Florida – steel producers and traders, the kind of Americans who still smoke and drink large quantities of beer. They want to hear about China and are friendly. Given that I have to address them at 8am and they were out drinking the night before, I write up a short note about the four points I told them to bear in mind when thinking about China in the next few years.

That done, I am looking for something to occupy me on a Saturday night in Orlando when I notice a poster of an aging blond woman who looks strangely familiar. The haggard, too-much-Prozac look makes me think of a kindly Delta Airlines stewardess who served me coffee on the flight in. But no. On close inspection I realise that what I am looking at is the current incarnation of Debbie Harry, lead singer of the eponymous band Blondie. A quick web search reveals that she was born in Florida, before being adopted by shopkeepers in New Jersey. As if this isn’t compulsion enough, while I am on my rebellious lone jog, my i-pod randomly shuffles Union City Blues to the top of the playlist – a song I have not heard for a long time. It is obvious that I am destined to attend a Blondie concert at the Universal Studios theme park in Orlando. Will it be better than the theme park gig in This is Spinal Tap, where the rockers open for a puppet show?

We must support the aged. I take back what I said about Ms Harry’s appearance on realising that she – singer of one of the first singles I ever bought, aged about 10 – is now 65 years old. We must respect the aged because it will not be long before we dwell among their number.

On which subject, it is worth mentioning that a major golden oldie, one who has been to crack hell and back, has just brought out an album that may be rather good. After many disappointing later-life recordings, Gil Scott Heron has released an album with a slick, modern sound that may be what the poet-singer has been looking for for so long. I saw him in London, years ago, in the midst of quest for something new and good and he was rubbish. But in this album there reside flashes of the tortured genius of his youth. You can have a listen here.

And so what of Debbie Harry and crew in concert in a theme park? Well, let’s just say I may have seen the future and it ain’t entirely pretty. Debbie darling, if you are reading: you cannot wear a bondage girdle and have a tea mug on stage. There has to be a choice.

 

More:

Oh, when we were young.

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Book Review: The Dark Heart of Italy

January 29, 2010

Much of my life (because it is part of my work) is spent reading books, but so far on this blog I have not attempted a book review. Somehow it seems apt to begin with a book about Italy, and one which has aroused extreme passions.

The Dark Heart of Italy is not an original book. It fits into a post-Second World War tradition of informed foreigners deconstructing Italy at a national, political level (think of Banfield, Ginsborg, Stille, Lane). Sometimes this goes from the local and particular to the general (Banfield); more often, it is top down.

So The Dark Heart of Italy is not so much a book in its own right as another iteration of a genre. Myself, I find this genre to be a serious one characterised by serious authors. None of those mentioned thus far is a flippant or publicity-seeking writer. (Think of the opposite tradition, typified by Frances Mayes’ romantic fantasy, Under the Tuscan Sun). The Italy deconstruction is a serious business. This applies equally to the Italians who have practised the craft: Levi, Sciascia, Pirandello, Lampedusa… Indeed, it is striking how seriously non-fiction authors treat Italy, a country that could easily be handled in critical books in the way it is in the UK and American tabloid press.

At least as interesting as the content of The Dark Heart of Italy is an attempt to understand why it elicits extreme responses. A quick read of 46 reviews on Amazon’s UK site shows the book to have 20 five-star and nine one-star verdicts. In other words, the great majority of reviewers say this is either a very good book or a very bad book.

First, however, to the content. The Dark Heart of Italy flits in an out of personal experiences of the author while he was living four years in Parma. But its narrative drive comes from a potted history of post-Second World War communist and fascist terrorism and Italy’s failed attempts to attribute responsibility for this, most particularly through the legal system.

Intellectually, Jones’ approach follows your archetypcal northern European, post-Englightenment logic: if I do enough work, and think very carefully, I will arrive at plausible, rational explanations. Needless to say, this does not happen, and much of the book details the endless paper trail that the author follows to nowhere.

Along the way, there are astute observations. On the nature of the legal system: ‘What is important is not the principle, but the points of law. Codify, recodify, encrypt. Quod not est in actis non est in mundo: anything not written down, documented, simply doesn’t exist.’ On the failure to reach decisions: ‘No one is ever entirely guilty, no one is ever simply innocent. It’s part of the rewiring process of living in Italy that you can never say, even about the most crooked criminal, that they are factually, legally guilty: there’s always the qualifier that they’re “both innocent and guilty”. Sooner or later the accusation will be dropped anyway, because the deadline for a judicial decision has been superseded.’ On the politicisation of the judiciary: ‘If you point out that the Italian parliament (of 650 senators or deputies) currently has fifty politicians inquisiti (under investigation), people simply shrug: “the magistrates must be out to get them, that’s all.”’ On the reality of a political class that changes affiliations but not personnel: ‘in 1960… of the 64 first-class provincial prefects, all but two had served under Fascism, as had all 241 deputy prefects, and 135 questori (provincial chiefs of the state police). As late as 1973, 95% of all civil servants had been appointed to the service before the fall of Mussolini.’ On the concurrent presence of political extremism: ‘”There must be a reason,” an Italian academic wrote recently, “why it was Italy which was the fatherland of Fascism and of the largest Communist party in the western world.”’ On conspiracy theories: ‘Surrounding any crime or political event, there is always confusion, suspicion and “the bacillus of secrecy”. So much so that dietrologia has become a sort of national pastime. It means literally “behindology”, or the attempt to trump even the most fanciful and contorted conspiracy theory.’ (The recent Sollecito-Knox case in Perugia, about which I blogged in February 2009 and in December 2009, bears some of these hallmarks.)

On the contrast between the beauty you see around you and the cultural condition of contemporary Italy, Jones quotes a friend: ‘What you don’t realise, what none of you British realise, is that Italy is a cultural desert. You come here to gawp at buildings and chipped statues from 500 years ago, and imagine that we’re still in that level of cultural production. Which is, of course, absolute balls: Italy’s now, culturally, completely arid. If I were you I would go back to the 50s and 60s. Switch off the television and watch some old films instead…’

And there is a good description of the celebrated Sofri case, which led to a highly questionable 22-year term for a stubborn and principled political activist for, as one journalist put it, ‘not having doffed his cap to the bureaucratic cast of the judiciary’. There is a long interview with Sofri in which the jailed man observes of the judicial system: ‘Dietrologia is the air that you breathe in Italy. It’s the result of paranoia and jealousy, and it simply exalts an intricate intelligence. It’s like Othello and Desdemona’s handkerchief: one innocent object can spark off endless suspicions. It’s a game off endless suspicions. It’s a game which people play, almost to show off. I prefer not to see a conspiracy which exists than to see one where it doesn’t.’

Finally, there is a useful outline of the origins, the playing out and the undermining of the Mani Pulite anti-corruption movement in the early 1990s. Craxi is pelted with coins outside the hotel Raphael in Rome and soon flees into exile, the public sprays town walls with exultant graffiti about the defeat of dark forces, and Silvio Berlusconi creates a new political party named after a football chant, inviting top anti-corruption judge Antonio di Pietro to be his Minister for Justice. ‘His [di Pietro’s] moralising anxiety,’ declared Berlusconi, ‘belongs to everyone.’ Today that remark seems even funnier than it did 16 years ago. Di Pietro turned him down, but Berlusconi convinced at least one other Clean Hands magistrate to join Forza Italia.

The problem with the book, I think, is that it does not clearly separate institutions from people. The realisation that Jones comes to is of the low institutional quality of Italy. But because this is bound up with the individual stories of politicians, journalists, lawyers and others, the tale becomes an unduly general one of a failed society. There is a tendency to see failed institutions as the product of a failed people. On the contrary, I think it is more accurate to see failed individuals – terrorists, corrupt politicians, egomaniacal magistrates – as symptoms of institutional weakness rather than proof of societal failure. This leaves open the possibility – to me a certainty – that in Italy’s atomised, localised and family-centric sociology there are not only people who are unsullied by institutional weakness, there are also those who react against it by becoming ‘super-moral’ contributors to society. The biggest challenge of a deconstruction of Italy, which is always drawn to critique its institutions, is not to explain why there are so many crooks, but rather why there are not more.

In addition, one has to give a nod – which Jones does not – to odd areas of institutional strength. On many trains, and in many schools and hospitals in Italy – to give a few examples – my experience is that the attitude and morale of the ‘public servants’ one encounters is often better that what I see in the UK (though I have less recent experience there). The school system has an institutional integrity that comes from not being ghettoised between state and private provision like the UK one, even if more and more people are lamenting the condition of secondary education. There are clear benefits to the less centralised institutional structure of the country, something that all major political parties in the (super-centralised) UK have been talking up in recent years. And town centres in Italy are maintained with a loving care and pride that is much rarer in the UK. These points, and others, don’t wipe out the sins of Italy’s vampiric state-linked professional classes, but the points are nonetheless valid.

And so to those wildly divergent Amazon reviews. It is notable that among those who give The Dark Heart of Italy five stars and particularly rousing praise are Italians who have moved to the UK. Among the one-star reviews, meanwhile, are slightly hysterical Italians living in Italy and English women married to Italian men.

 

The book deserves ratings in the middle, and this is where the more thoughtful comments are found. One that is hard to disagree with is the observation that Jones could, of course, ‘write a book called the Dark Heart of Great Britain. Where we all live in this hellish society trapped in houses by rain, where everybody is overworked, bank holidays and Sundays are spent in the shopping centre and our only escape is through the good people on the TV who will find us a new life somewhere in Tuscany, Spain or France.’ Myself, I am giving the book four stars, which is above the current average of 3.6. (It is notable on Amazon that it is very hard to get a high score for a non-fiction book on Italy.)

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No FT, no rubbish on your breakfast tray

January 22, 2010

The Financial Times greets Obama’s promise to restore something akin to Glass-Steagall with the worst, most congenitally spineless and brainless editorial (you may need a subscription to read this drivel…) that I can remember on its pink pages.

It starts with a tabloid headline – ‘Obama in declaration of war on Wall Street’ – and goes quickly downhill. The first four words of the first sentence are ‘Markets nosedived on Thursday…’ This refers to falls of 1.9% in the S&P 500 and 1.6% in the FTSE 100. They didn’t write ‘spiralled out of control’ when the same markets went up by not much less a couple of days before.

But it is the non-attempt to critique what Obama is saying that riles. The president should not try, the paper says, to prevent deposit-taking banks from trading on their own account because: ‘Boundaries between bank functions will be hard to draw.’ It is that old chestnut of the gormless right: this sounds new and unusual and a little bit difficult, so let’s do nothing.

Instead, The FT recommends an immediate return to the failed approach of the past 40 years: ‘The government’s key policy lever should be to make sure that institutions hold enough capital to reflect the risks that they run and the threats that they pose to the rest of the financial system.’ There have been endless efforts to regulate banks through their capital rather than their structures and they have failed for a very simple reason. It is that you cannot make rules about capital adequacy that are valid through the economic cycle.

In other words, the amount of capital that it is appropriate for a bank to hold when no one wants to invest (like now) is completely different to the amount of capital a bank should be made to hold when the world thinks that property prices will never fall again (a la pre-crisis). This is why economists refer to banks as pro-cyclical: they make economic cycles worse by mirroring the greed and fear of society at large.

Management by capital alone could only be effective if it was run by some kind of omnisicient, globally-empowered committee. This would tell the banking industry how much capital it should have at different points in the economic cycle. Banks would be instructed by the world’s cleverest men and women when to calm down and when to lend against their will.

Think about this for a moment. You will now have realised that the proposal is completely impracticable. There could never be a Pareto-efficient agreement about who should be on this committee any more than there is about who should be on the UN Security Council. And such a system almost certainly would not work anyway, because the chances of finding omniscient people are extremely small.

So you do what works. That means separating the utility and speculative functions of financial institutions in a way similar to what was done by the 1933 Glass-Steagall Act. People who want to play with the savings of the ordinary, conservative public must run one kind of bank, whose activities are narrowly circumscribed; people who want to leverage up 30 or 40 times must operate a different kind of financial business in which the capital at risk really will be lost when things go pear-shaped.

Why is this so difficult to agree on? The FT completely fails to point out that Paul Volcker, who has been brought in to consult on the reforms, is a highly orthodox former federal reserve governor who was reappointed to that position by Ronald Reagan. He is not some kind of hippy. What Volcker has, and what Obama’s current economics and fed team palpably lacks, is the intellectual reach and self-confidence to figure out and push through simple, effective changes which the US establishment will not like.

More…

The FT editorial is also completely at odds with what its own chief business commentator writes and with what its investment editor has to say

Here, in The New York Times, is someone else who is not a hippy writing sensibly about bank regulation.

Here is reaction from emerging markets guru Chris Wood.

The Economist is hurt by its Thursday publication day, having produced a two-page briefing on bank regulation prior to Obama’s ‘Glass-Steagall’ remarks. A reaction to the latest news is posted to The Economist site.

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Upload: final three FEER articles

January 20, 2010

There have been various requests for me to upload some journalism and book-related work, so here is a (small) start. The following links connect to the last three articles I wrote for the Far Eastern Economic Review. We know they are the last articles, because in December the Wall Street Journal (now controlled by Rupert Murdoch), the owner of the FEER, closed that venerable magazine down. I was fortunate to be asked to contribute to the final issue, and wrote a piece contextualising China’s development in terms of what we have seen, historically, elsewhere in east Asia.  From the autumn of 2009 there is a piece about how China developed its iron and steel industry, again with lots of developing country perspective, which also explains why iron ore producers in Australia, Brazil, India and elswhere are making so much money out of China. Finally, in true Chinese spirit, there is a self-criticism of my 2002 book The China Dream, written in late 2008.

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Your money or your freedom

January 15, 2010

 

Another rumbling of perhaps not-so-distant thunder. Google’s threat to pull out of China is a significant development in increasingly confrontational relations between China and ‘the West’ (which in my definition is not really west because it includes Japan, as well as Europe and the US). Google’s move ratchets up another notch the political pressure that has been rising over market access for foreign firms, the question of the Renminbi exchange rate, negotiations over China’s vast iron ore imports and the arrest (initially on espionage charges) of Rio Tinto employees, and the handling of Chinese political dissidents, not least ones involved in the new-ish Charter ’08 movement.

 

Note that most of these are commercial and economic disputes. A simple metric has been at work in relations between China and the West since the Tiananmen massacre of 1989. It can be summed up as a Western bottom line of: ‘Your money or your freedom’. In the early 90s, in the first months of Bill Clinton’s first term, there was a momentary clamour for China to mollify the West by becoming freer. This did not last very long, mainly because China offered the West a different prize: money (or at least the strong smell of profit via Chinese market opening). Everyone has their price, and in the golden years between the 2002 start of the last Chinese credit cycle and the 2008 global financial crisis, the West was paid in money.

 

The situation — or at least perception of it — began to change in the past two to three years as China recycled vast amounts of foreign exchange earnings into (mostly) foreign government bonds. The main result was to maintain an artificially depressed exchange rate which helps China-based exports. Everybody else in Asia has done this over the years but, as China’s currency management continued against a backdrop of global economic recession, and as more and more multinational companies started to complain that China is finding new ways to block their market access, Western governments have gotten increasingly miffed. Throw in the arrests of Rio Tinto employees, initially on charges of espionage, and you have the beginnings of a Western consensus that China is no longer paying enough for us to overlook its unpleasant human rights record. At least, I think, this is a useful way of viewing the situation.

 

Google’s threat to quit, interestingly, is more a human rights/morality position than a commercial one. It has, it says, been the subject of orchestrated attacks (using Microsoft’s Internet Explorer as the point of access) seeking to obtain information about human rights activists and campaigners dealing with China. Lots of other human rights lobbyists, lawyers, journalists and so on have had their Gmail accounts hacked, not via assaults on Google itself but through direct attacks on email users themselves. Google has not pointed the finger directly, but it is hard to imagine who would attempt to do these things on a regular basis beyond agents – at whatever degree removed – of the state. There have been various attempts in media coverage to spin the story such that Google, which has about a 30% share of the China search market compared with more like 60% for Baidu, is really willing to walk away because it is not the market leader. This is crude and unfair. The reality, surely, is that Google is putting up (morally) with way too much in return for what it is getting out (financially) from China. Everyone has their price, and Google’s is too high for China. That does not mean Google is bad, it means it is far better than most. The firm was willing to run censorship (albeit a bit less than Baidu) on its Chinese search engine in order to get a .cn presence, but having its systems attacked in a quest for information on political dissidents is too much. Compare that with Yahoo! which in 2004 voluntarily provided information to Chinese authorities which led to the jailing of a journalist for 10 years.

 

It will be interesting to see how the commercial fortunes of Baidu and Google are affected, long-term, if Google does quit China. Baidu’s share price has shot up around 15% since Google publicly stated its position, presumably on the assumption that it can now get a virtual monopoly position in search. Google’s share price is unaffected. I am making a note to check where they are at in five and ten years.

 

Meanwhile, for your delectation, here are some of my favourite word search terms that Baidu uses to censor and block web pages in China. These are my own (doubtless flawed) translations from documents leaked by a Baidu employee in 2009.

 

communist party

brainwashing

dictatorship

don’t love the party 

network blocked

the current government

China human rights

princeling [refers to children of political leaders]

the party now

one-party rule 

freedom of speech

common bandit

today’s police

defend legal rights

severance

requisition land

meditate

the masses

government official drives the people to revolt

bandit officials

suppress students

Zhao Ziyang

political crisis

evedropping device

sell blood

wife swap

oral sex

vagina

bestiality

mother and son incest

a night of passion

cheating in examinations
the sale of the answer
fake diploma

More links

Rebecca Mackinnon, who knows far more about this stuff than me, writes a spirited op-ed in the WSJ and seems to have a similar opinion.

 

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‘Corrupt, smut-driven, racist and lawless’…

January 11, 2010

 … that’s right, it is The Guardian’s columnist Martin Kettle explaining why he has fallen out of love with Italy.

Like the steady stream of northern European literary greats from Goethe to Browning to Keats and Shelley (stay in a house in Rome associated with these and more if you wish…), Kettle admits to a youth in which he fell for ‘a world of the senses, where the heart ruled the head, where beauty replaced ugliness and where easygoing moral naturalness replaced all the buttoned-up severity of the protestant world’.

All that, however, is over for Kettle. He dismisses his love affair as a naive, adolescent fling: ‘Italy has never been the liberal Eden that progressive Europeans sometimes delude themselves into imagining it to be,’ he writes. Instead, Kettle is now focused on an all-too-common kind of Italian who allows Silvio Berlusconi to be elected three times, just as a certain kind of parallel American allowed George W. Bush to be chosen twice. The difference, says Kettle, is that where Bush gave rise to Obama, Berlusconi has produced no such credible, corrective liberal reaction. It’s all right, right and more right.

The outburst gives rise to a riposte in The Guardian from the deputy head of the Italian embassy in London, Giovanni Brauzzi. There isn’t much to Brauzzi’s comment – beyond its inevitable counter-indignation – yet there may be something to Brauzzi’s tangential implication that Italians are less racist than popularly perceived.

The hook for Kettle’s article was a house-to-house search by police in a town near Brescia for illegal immigrants in the run-up to Christmas. Kettle referenced John Hooper’s report for The Guardian from Coccaglio where what has been dubbed ‘Operation White Christmas’ (the conservative town council denies having come up with the racist epithet) took place. He didn’t however reiterate Hooper’s point that in a town of only 8,000, 3,000 people marched in protest against Operation White Christmas.

How racist is the average Italian? I confess that I have no answer to this question about which I can demonstrate any conviction. I am willing to say that the average Italian is parochial – little-travelled, largely ignorant of the wider world, unaccomplished in foreign languages – but that is not the same as the charge of malicious racism levelled by Kettle.

In defence of Italians (inasmuch as this term means anything), poll results published on December 3 by the German Marshall Fund of the US, which cover each major European and north American state, show Italy in quite a liberal light.

Less than one-quarter of Italians, for instance, agreed with the statement ‘Immigrants take jobs away from natives’, whereas more than half of Britons did. Only about one-tenth of Italians agreed with the statement ‘Legal immigrants have no equal rights to benefits’, but 45 percent of Britons did. Most Italians favour giving voting rights to immigrants where most Britons do not. And marginally fewer Italians than Britons agreed with the statement ‘Legal immigrants increase crime’. Both Italians and Britons are against giving illegal immigrants the chance to obtain legal status (unlike the super- and uber- liberal French and Germans).

In the Brit-Italian comparisons it should probably be borne in mind that Britain has a higher proportion of immigrants in its population than Italy does, and that the number in Britain increased very rapidly in the past decade (though quite rapidly in Italy as well; in Britain the demand came from economic growth, in Italy from a shrinking indigenous population).

There is, of course, one constant in attitudes to immigrants around the world: everybody, in every country, thinks there are way more of them than there really are. In the survey cited, the average American estimated that immigratnts make up 35% of the US population (versus reality of around 14%). In Canada the estimate was 37% (reality 20%). And in Europe the average stated was 24% (versus actual highs of around 13% in Spain and Germany). Which all reminds me of the following conversation with a local bar owner some years ago… Bar owner: ‘I’m thinking of getting a Rottweiler.’ Me: ‘What for?’ Bar owner: ‘Albanians.’ Me: ‘But we haven’t really got any Albanians around here.’ Bar owner: ‘But we might have.’

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Chinese soft power

January 5, 2010

The Chinese government decides to remind us that, whereas Italy is an institutionally weak state, China is the authentic institutional Third World, the real McCoy (or real Mackay if you prefer the likely Scottish origin of this term) of arbitrary, unprofessional and gratuitously nasty behaviour. I refer to the execution of a mentally-ill Briton, and an 11-year jail sentence for one of China’s best-known pro-democracy campaigners, which occurred in the same week.

 Akmal Shaikh, 53, a former London minicab manager, was executed in Urumqi for arriving in China with a suitcase containing 4kg of heroin. He had a long history of psychiatric problems. It appears that drug traffickers duped him into carrying the drugs and sent him to China saying it was part of a plan for him to fulfil his ambition of becoming a ‘pop star’. Arrested on arrival, Shaikh was given a 30 minute trial. During a statement he made during his also brief appeal, judges laughed at Shaikh’s nonsensical discourse and confirmed the death penalty, as this China law blog relates.

The 11-year jail sentence was handed down to writer Liu Xiaobo for ‘inciting subversion of state power’. Liu is one of the main drafters of Charter ’08, the Chinese pro-democracy manifesto published two years ago and modelled on Charter ’77, which was launched by dissidents in Czechoslovakia in the midst of the Cold War. Liu was also given a very brief trial at which his lawyers were allowed almost no time to present a defence (the obvious defence is that Liu has done nothing other than exercise rights guaranteed by China’s constitution). The court condemned him at Christmas, presumably in the hope that foreigners were thinking about other things.

If this was the hope, it may have been misplaced, since the cases of both Liu Xiaobo and Akmal Shaikh have received worldwide media coverage. Not for a long time has China faced so much negative press in such a short period.

The Chinese government and its running dogs have shot back with what philosophers call ‘moral equivalence’, or the argument that ‘you’re just the same as we are, only from a different culture’. This might involve reference to the fact that the death penalty is used in the United States, or that all countries have to defend against attacks on state power. 

But these attempts at obfuscation  do not cloud what is stark reality. In the Shaikh case, the court refused to allow either an independent local doctor or a psychiatrist sent from Britain to meet or assess the defendant. China’s 1997 Criminal Code states that a person who is unable to recognize or control his own misconduct does not bear criminal responsibility. However there is no clear requirement for a court to order a psychiatric evaluation. The main justice-related role of psychiatric institutions in China continues to be as places in which to lock up sane people who have criticised the state.  

The Liu case is a reminder that China’s courts are subject to direction by the Communist Party’s  Central Political-Legal Committee, currently headed by former Minister of Public Security Zhou Yongkang, which determines the outcome of many ‘special’ cases and makes sure that others – such as challenges to the Party – are never admitted to trial. Liu’s 11-year sentence was not really a judicial decision at all. 

A selction of British press comment on the execution of Akmal Shaikh:

http://www.guardian.co.uk/politics/blog/2009/dec/29/china-akmal-shaikh-execution

http://www.guardian.co.uk/world/2009/dec/29/amnesty-akmal-shaikh-execution-reaction

http://www.guardian.co.uk/commentisfree/libertycentral/2009/dec/29/china-akmal-shaikh-death-penalty

http://www.telegraph.co.uk/news/worldnews/asia/china/6904175/Execution-of-Briton-Akmal-Shaikh-China-defiant-in-the-face-of-criticism.html

http://www.independent.co.uk/news/uk/politics/china-defiant-after-britons-execution-1852307.html

http://www.timesonline.co.uk/tol/news/world/asia/article6970154.ece

More information about Liu Xiaobo:

http://www.pen.org/viewmedia.php/prmMID/3029/prmID/172

http://www.hrw.org/en/news/2009/12/21/china-liu-xiaobo-s-trial-travesty-justice

http://en.wikipedia.org/wiki/Liu_Xiaobo

Deja vu all over again: the letter which Vaclev Havel and others connected with Charter ’77 tried to deliver to the Chinese embassy in Prague (as reprinted in the Washington Post) http://www.washingtonpost.com/wp-dyn/content/article/2010/01/08/AR2010010803376.html?hpid%3Dopinionsbox1&sub=AR

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Professor Plum and Miss Scarlett, in the bedroom, with big daggers and no motive …

December 8, 2009

The conviction of Raffaele Sollecito and Amanda Knox for, amongst other things, murder, in Perugia highlights a simple, cultural question: how do you like your theories – straight-up conspiracy, or otherwise? Because, it seems to me, you need to be a conspiracy junky to go for this one.

Despite a trial of 11 months, the basic issues of this case do not appear to be hugely complicated. First up, remember that the trial took 11 months largely because it only sat for, at most, two half days a week, and that the whole thing was stopped for two months because it was, err, the summer. If the court had concentrated full-time, Monday to Friday, on this case, and not skipped off to the seaside or wherever, a rough calculation suggests it would have been done in around 10 weeks. One point of view I completely disagree with is this, quoted from one Michele Ainis, who is cited as an expert in Italian constitutional law in The New York Times: ‘It’s true that the longer the trial,’ he says, ‘the longer the pain, but it also means that there can be an in-depth analysis of the facts.’ This conflates the kind of time wasting and dicking around that goes on in the Italian court system with a higher form of investigation. The truth, surely, is that this case reminds us of just how dangerous the Italian ‘part-time’ approach to legal cases may be.

So to the basic issues. There is a crime scene, the location of which – to my knowledge – no one disputes. It is the room of the murdered student Meredith Kercher, where her dead body was found. One person is tied to the crime scene by heavy forensic evidence – finger-prints, a bloody hand-print, and DNA. This is Rudy Guede, already sentenced to 30 years for Kercher’s murder in an earlier trial. There was no conspiracy theory about Guede. He was found because his prints and DNA were at the scene, and the police located him in their database (he already had a police record). When they went looking for Guede a couple of weeks after the murder, they discovered that he had fled from Italy to Germany.

Sollecito and Knox were not brought into the case because police found clear forensic evidence and then went looking for them. They were brought into the case because police and the investigating magistrate became suspicious of them, and then went looking for evidence. Perhaps critically, the authorities decided that Sollecito and Knox were involved before it was clear that prints and DNA at the scene belonged to Guede. Subsequently, the prosecution case became that all three persons were responsible for the murder.

So what evidence is there that Sollecito and Knox were present at the crime scene? There was no forensic evidence presented in the case to show that Knox had been in the room – no prints, no DNA, nothing. With respect to Sollecito, the prosecution said that traces of his DNA were found on a bra clasp belonging to Kercher which police bagged on a return visit to the crime scene 46 days after the murder. There was no other Sollecito DNA found in the room, including on the rest of the bra, and no prints. Despite this lack of forensic evidence, the prosecution made a case that Kercher was killed at the end of a violent sex game involving Guede, Sollecito and Knox. Perhaps you see now what I mean about one’s propensity for conspiracy theories. In order for this to be possible, Sollecito and Knox must have been present at the crime scene in such as way as to leave Guede’s forensic detritus all over the place and yet remove all of their own prints and DNA except for a bit of Sollecito’s on a bra clasp. How? The two explanations I can think of are a) that Sollecito and Knox took part in a sex game dressed in some kind of protective forensive overalls while Guede didn’t, or b) that afterwards Sollecito and Knox selectively cleaned up only evidence of themselves, leaving Guede’s intact, using some kind of finger print and DNA differentiator machine they happened to have about their persons.

This is not terribly compelling. Apart from the bra clasp (whose belated discovery points most obviously to shocking standards of police work), only two other bits of forensic evidence were presented against Sollecito and Knox. In a communal bathroom, where some drops of Kercher’s blood were found, there was Knox’s DNA. Given that Knox says she took a shower in the room the morning after the murder and noticed the blood, this hardly seems damning. Finally there is a tiny trace of what prosecutors claim is Kercher’s DNA on a knife at Sollecito’s apartment. This would be of real interest, except that the trace is so minute that independent experts say that it cannot be relied on (and indeed would not be admitted in many jurisdictions). Moreover, this knife is a possible fit for only one of three major wounds on Kercher’s body.

Given the paucity of forensic evidence against Sollecito and Knox, as opposed to the very substantial amount against Guede, most people, I suspect, would want to hear a compelling case for the motivation of the first two. After the chief prosecutor’s intimations of a cult killing (oh yes), about which I blogged back in February 2009, were knocked back, the prosecution had nothing more substantive to offer. The prosecutiing team switched, without any hard evidence, to an argument that Knox, orchestrating the murder, was driven by hatred of Kercher. As this line was pursued, the presiding judge, Giancarlo Massei, allowed both hearsay and subjective assessment to be offered in court. Chief prosecutor Mignini, for instance, told the court (referencing some missing money): ‘We do not know with certainty what intentions they [Guede, Sollecito, Knox, at the onset of their alleged murderous sex game] may have had. But it is possible that there was an argument, which then degenerated, between Mez [Meredith] and Amanda over the money that disappeared. Or perhaps the British student was upset by Guede’s presence.’

It is possible that horoscopes are based in scientific fact, that farting in Denmark can cause earthquakes in Japan, and that my dog can sing in Welsh. Nonetheless, such claims are not normally admissible in court without a demonstrable basis in fact. Here, for the record, are Mignini’s above remarks in the original Italian: ‘Non sappiamo con certezza [I suspect a logician or a philosopher might translate this as: ‘We have no clue’] che intenzioni avessero, ma è possibile che ci sia stata una discussione, poi degenerata, tra Mez e Amanda per i soldi scomparsi. O forse la studentessa inglese era contrariata per la presenza di Guede.’ Whatever the intention, said Mignini, group leader Knox, ‘voleva vendicarsi di quella smorfiosa troppo seria e morigerata per i suoi gusti’. So Knox led Sollecito, whom she had known for six days, and Guede, whom she barely knew, in a violent sex game which left no trace of her presence at the crime scene and ended in Kercher’s murder.

The question one asks next is how could a jury convict based on the evidence presented? We do not know and we should not speculate. Within 90 days the presiding judge will publish some kind of explanation. For now, however, it may be worth reflecting on what I understand to have been the methodology behind the jury’s decision.

In a British court, a judge provides direction to jurors (about things that must be considered, things which may not be considered), before they retire to consider their verdict. Moreover, jurors are ‘sequestered’, which means that they should not have been reading newspapers, watching television news, discussing the case with members of the public, and so on; they are supposed to concentrate exclusively on the case, which runs each working day until it ends.

A British judge’s direction to jurors is important and is frequently shown to have played a role in miscarriages of justice. The direction, however, is given in front of the court and the public. In a case such as that of Sollecito and Knox in Italy – as I understand it – it is two ‘professional’ jurors (i.e. members of the legal establishment) who sum up the evidence, and provide guidance as to what is most important, to six lay jurors in camera. Personally, I am at a loss as to what jurisprudential benefit this can offer. It means there is no clear public record of the direction that is provided. And it means that the lay jurors never escape from the paternal oversight of the court apparatus. This seems to me another example of the deference to the supposed expert with which Italy is plagued — rule by what in previous blogs I have termed a ‘bureaucratic aristocracy’. Myself, I would be much happier placing more trust in ordinary people. That is not the Italian way, despite – in my view – the daily evidence that it is this country’s professional classes that represent not its greatest asset but its biggest problem.

This brings us to the family of the murdered girl. After the verdicts, Kercher family members gave a press conference and made two points. The first is that in a situation like this you have to trust ‘the system’; the second is that they now have a decision and hence some kind of closure. Although I sympathise profoundly, I disagree with both these points. On the first, I know of no legal system in the world that has not produced miscarriages of justice; in the UK I followed some of these, professionally, in the distant past as a journalist. Given (for a rich country) the extreme institutional weakness of Italy, there is no case for blindly trusting the system here. The system can work in Italy, but it is reasonable to be more sceptical that it will than in most other OECD countries. On the second point, I suspect that within days of the verdicts (if not already) the Kerchers will realise these verdicts bring no closure, because the Italian justice system does not really do closure. Appeals are granted almost automatically. Moreover, as defence lawyers have been quick to note, the verdicts in this case of themselves demand appeals. With the conspiracy theory accepted, Guede is not alleged to have delivered the fatal blows, and yet has gone down for 30 years. Sollecito and Knox (the latter deemed to have delivered the mortal blow) have been given sentences of 25 and 26 years respectively. These are not the life (ergastolo) terms that the alleged crime would warrant. The sentences are inconsistent, almost made to be appealed. Indeed they look to some observers like ‘get me out of here and make this somebody else’s problem’ sentences on the part of the jury. And that is exactly what will happen in a process as likely to prolong as to curtail the suffering of Meredith Kercher’s family and friends.

On this question, here is something that I read in the Corriere della Sera: ‘Per la giuria popolare [i.e. the lay jurors] non è stata una decisione facile: condannare due ragazzi di 25 e 22 anni all’ergastolo sarebbe stato distruggere per sempre la loro vita; assolverli avrebbe significato sconfessare non solo l’intera inchiesta ma anche i giudici che prima di loro si sono espressi. Ed è arrivata una condanna a metà.’ Well, you said it, not me. If you don’t read Italian, what the newspaper appears to be suggesting is that Sollecito and Knox’s sentences were a compromise between embarrassing the court and the prosecution, and condemning the two to life in prison, which would be consistent with Guede’s term.

Separately, it is notable how upleasantly politicised this trial has become at the international level. This can only get worse. Knox is American, and various Americans are alleging anti-Americanism. I cannot see the evidence for this. Sollecito is Italian and he has gone down too. What is at issue here is the institutional weaknesses of Italian justice and the particular facts of the Perugia trial, not some assault on Uncle Sam. Moreover, Americans need to be a little careful about getting on their high horse over Italian justice. Theirs, after all, is the first country I am aware of to imprison fully one percent of its population, in an approach to law and order that most Europeans find despicable. This failure is not generally one of institutional shortcomings, but instead of a tolerance for levels of inequality and general ‘unfairness’ in society that are not present in Europe. Nonetheless, miscarriages of justice, as I said earlier, occur in all jurisdictions. The last case I paid any attention to before this one was OJ Simpson…

Those sceptical of the verdicts that have been handed down in Perugia need to remain closely focused. At the same time, I think Knox’s family is absolutely right to attract as much publicity as possible to the case. When confronted with institutional failure, as I have seen again and again in developing countries in Asia, it is essential to maintain the glare of public attention. This is the main way in which institutionally weak societies are compelled to confront their failings. The international noise needs to be loud, but not shrill.

Finally, finally, here is my reminder of the ways to create the kind of mess that this case represents: 1. lousy police work; the handling of the forensics in Perugia has been shoddy and yet the outcome of the case has rested largely on forensic evidence 2. A ‘professional’ class which sets its example by not following the rules. This is a society where policemen don’t wear seatbelts, park how they like, etc. In this case we have seen the judicial equivalent: despite rules which say that the findings of police investigations are secret until prosecutors ask for an indictment, in Perugia (as in almost all high-profile cases in Italy) there have been relentless leaks to the press from the outset. If the police and the magistracy leak information in contravention of basic rules of procedure, what reasonable expectation can there be for other people’s behaviour? Italian primary school teachers (thankfully) seem to understand that their job is about setting the right example, but not the rest of the Italian professional class. 

Links of interest:

A New York Times op-ed lets rip (but forgets about all those incarcerated Americans) before the verdicts are announced. 

From the Guardian’s generally excellent John Hooper, first a timeline for the murder and a guide to how weak forensic and circumstantial evidence might suggest that Sollecito and Knox were involved. 

Then Hooper’s review of questions raised about the Italian legal system and a discussion of questions of ‘face’ in Italy (something familiar to any student of China). Note that this story is filed after the one above and Hooper’s view, given more time for reflection, seems much more sceptical of the court’s decision. (I raise this point merely to remind readers of the pressures that serious journalists face, writing about complex issues to deadline.) 

Video

Final statements to court. Personally, I am not convinced these statements reflect the greatest legal advice. Sollecito reads a rather anodyne prepared statement, with just a few (presumably huge) words on each page, and looks stilted.  Knox attempts some kind of sucking up to the court, thanking jurors and prosecution for doing their job. If I had been subject to the kind of investigation, detention and character assassination witnessed in this trial, I would not have been thanking anyone.

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Lost in translation

November 17, 2009

A four-state research trip begins at Fiumincino in Rome, where on a Sunday afternoon the worst chaos I have seen in the Italian capital’s airport reigns. Hundreds of people are crammed into the main security area, a single incoherent mass that takes an hour to pass through the security check. Amid the crush, a British genius yells ‘You need to open more channels’ as if he is the only person in the room that this has occurred to. One guesses the airport cannot find enough people to work on a Sunday afternoon, despite an economy shrinking five percent this year. A couple of Italians lose control completely, screaming like lunatics at the security staff; one of them continues in the same vein at a policeman who appears on the scene.

My Air China flight is delayed a couple of hours because it has been snowing in Beijing, so I can afford to be more patient than some; eventually I get to the gate. Seated in economy I dread a sleepless night travelling east, followed by the jetlag from hell. But soon after take-off I doze off and sleep better and longer than I often do when given a business class seat-bed for a speaking engagement.

The reason for my plane’s delay is snow in Beijing – where I am going first – which closed the airport for half a day. The BBC reports this is due to ‘cloud seeding’, a technique developed in the United States but popularised in China. It involves using airplanes or small rockets to seed clouds with silver idodide that induces rain. You cannot make extra rain like this, as I understand it, but you can make rain fall in places other than where it might fall naturally. The Beijing area is perennially short of water. According to media reports, Chinese meteorologists failed to calculate that wind and temperature conditions on this occasion would cause precipitation in the form of snow. The same thing is said to have occurred in February.

It is a brief, one-night stop in Beijing. On both occasions that I pass through the airport, for landing and for taking off to Tokyo, I have a good look out of the window at the Beijing area. Stories continue to be published in the press that pollution has improved. But all I see looking out of plane windows is a cigarette-smoke yellow haze that sits like an inverted shallow bowl over the city area. A pollution report published by the US embassy in Beijing suggests that the pollution story depends on which pollutants you choose to measure; it focuses on fine particles and tells a less sanguine tale than the official Chinese one.

And so to Japan, where I am ever-more struck by just how little English people speak, even in big cities. I am headed out to the countryside to look at the history of land reform, in what promises to be a supercharged, bucolic version of Lost in Translation, minus Scarlet Johansson.

On the upside, I can read about a quarter of the characters I see in Japan, because they come from Chinese. On the downside, I manage to leave my ‘Survival Japanese’ phrasebook at the friend’s house in Tokyo where I stay the first night.

The car I hire in suburban Tokyo has satellite navigation, but only in Japanese. The one real break I get is that before driving out of Tokyo I manage to enter a marker in the navigation system at the place I am staying. If not, I doubt I would ever have returned.

As much as any place I have been, Tokyo has to be seen to be believed. The vast majority of this vast city is low-rise, clap-board style houses reached by narrow (perhaps six metre wide) lanes which, in my experience, are never cul-de-sacs. These lanes, which are all demarcated with white lines that set aside a little of the precious space on either side for pedestrians and cyclists, go on and on and on.

To prove the point, I leave Tokyo by randomly weaving – following a general north-west trajectory shown on the navigation system – and drive for more than two hours through the lanes until I have had enough and switch to a bigger road. Every so often I come across a market, a school, a group of small one-room restaurants and bars, or a railway line. The more central parts of Tokyo are charming. But the sprawl that connects Tokyo with a series of what claim to be separate towns and cities (you only know it from the names) is ugly and unpleasant. I had not realised before how much Japan has succumbed to the American acceptance of acres of malls, discount stores, fast food restaurants and car showrooms along every significant highway in the country. This has brutalised large swathes of a naturally very beautiful place.

Still, driving into the central mountain range of Honshu island, I eventually reach hills too steep for development. This is where the forest land that covers so much of Japan begins. And it is very attractive forest, comprised of many different tree species, part evergreen and part deciduous. At this time of year the colours are phenomenal. I stay a night in Chichibu, epicentre of a large-scale nineteenth century peasant revolt, and then head across to Niigata on the west coast, an area famed for Japan’s best rice (and hence sake). It is here that a small number of pre-Second World War landlord houses I want to look at are preserved.

Niigata City itself is a reasonably attractive place, easy to navigate, and with excellent food. It comes as a shock that three hours on the expressway through the mountains to get there costs Euro50 in tolls.

The lack of English thing isn’t getting any better. There are shops I go into where the staff appears to have not a single word of English among it. I wander out again, empty-handed. I stay in quite a reasonable hotel, but the English there is up to very little. Eventually I find a woman in the back office who speaks enough English to help me programme the navigation system to find the farms I want to see. I don’t think I have ever felt so cut off from people around me in a place I have visited. They are very friendly and polite. We just cannot communicate.

After a couple of days it is time to head back to Tokyo. Getting to the capital is easy enough. Getting across the capital to my friend’s house is where the navigation system marker turns out to be critical. On a Sunday evening I am led by the machine through a maze of flyovers, tunnels, and complex intersections that would have seen me make a dozen mistakes or more trying to follow a map. Even with the satellite system, I get back after five or six hours in the car remembering why I have come to loathe driving: it is all wasted time; you can’t do anything while you are controlling a car.

Next day I fly to Taipei, stay in a grotty airport hotel, and go back to the airport for an early connection to Manila. There I switch to a local flight to Bacolod, the capital Negros Occidental, a place that has been dubbed ‘Sugarlandia’. In the 19th century it was turned into a sugar estate monoculture by European and American families and has remained pretty much that.

As the plane descends, you can already see multiple fires where farmers are burning off the residue in fields where sugar cane has been cut. There is sugar everywhere, even around the airport. November is part of the cutting season and every road seems to have one or more big trucks piled high with brown cane heading towards the nearest Central, as the sugar refineries are known.

I spend three days trying to understand why the land reform programme introduced after the 1986 flight of Ferdinand Marcos has failed to change the lives of most farmers here. Many landlords have found ways to hang on to their estates – the biggest local player is Eduardo ‘Danding’ Cojuangco, perhaps Marcos’s number one crony, who has never been brought to book – while farmers who have obtained plots have often ended up selling them because of debts to usurers. They then become estate workers again earning, at current exchange rates, about US$2 a day. With the help of some well-informed contacts, I manage to visit land reform cooperatives that are being somewhat more successful. We travel into deep countryside that is as stunningly beautiful as it is poor.

Then it is time for a stopover in Manila so that I can obtain a difficult-to-come-by book, a recent biography of Danding Cojuangco. Reading this on the plane home, I am pleased to note a striking parallel between the late Filipino fantasist duce Ferdinand Marcos and current Italian fantasist duce Silvio Berlusconi.

It seems that not only was the latter embarrassed by secret recordings of his pillow talk. Back in 1972, just before Ferdy plunged the Philippines into more than a decade of martial law, recordings of his bedroom exchanges with a B-movie actress called Dovie Beams (who had been making a movie in the Philippines) began to circulate in Manila. The tape, recorded by the actress before she fled the country, featured Ferdy moaning, singing his favourite folk songs, and begging for oral sex. The University of the Philippines radio station took to playing the recordings over and over. Ferdy, as was his standard refrain, said the whole thing was a communist conspiracy and sought to have various journalists jailed. Now where else have we heard and seen that?

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