Science Fiction?

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“What do I think about the legacy of Atatürk, General? Let it go. I don’t care. The age of Atatürk is over.”
Guests stiffen around the table, breath subtly indrawn; social gasps. This is heresy. People have been shot down in the streets of Istanbul for less. Adnan commands every eye.
“Atatürk was father of the nation, unquestionably. No Atatürk, no Turkey. But, at some point every child has to leave his father. You have to stand on your own two feet and find out if you’re a man. We’re like the kids that go on about how great their dads are; my dad’s the strongest, the best wrestler, the fastest driver, the biggest moustache. And when someone squares up to us, or calls us a name or even looks at us squinty, we run back shouting ‘I’ll get my dad, I’ll get my dad!’ At some point; we have to grow up. If you’ll pardon the expression, the balls have to drop. We talk the talk mighty fine; great nation, proud people, global union of the noble Turkic races, all that stuff. There’s no one like us for talking ourselves up. And then the EU says, All right, prove it. The door’s open, in you come; sit down, be one of us. Move out of the family home; move in with the other guys. Step out from the shadow of the Father of the Nation.
“And do you know what the European Union shows us about ourselves? We’re all those things we say we are. They weren’t lies, they weren’t boasts. We’re good. We’re big. We’re a powerhouse. We’ve got an economy that goes all the way to the South China Sea. We’ve got energy and ideas and talent – look at the stuff that’s coming out of those tin-shed business parks in the nano sector and the synthetic biology start-ups. Turkish. All Turkish. That’s the legacy of Atatürk. It doesn’t matter if the Kurds have their own Parliament or the French make everyone stand in Taksim Square and apologize to the Armenians. We’re the legacy of Atatürk. Turkey is the people. Atatürk’s done his job. He can crumble into dust now. The kid’s come right. The kid’s come very right. That’s why I believe the EU’s the best thing that’s ever happened to us because it’s finally taught us how to be Turks.”

The Dervish House by Ian McDonald, pp. 175-76

Jesus, Mary and Joseph

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From the BBC

In 1971 Manoli [Pagador], who was 23 at the time and not long married, gave birth to what she was told was a healthy baby boy, but he was immediately taken away for what were called routine tests.

Nine interminable hours passed. “Then, a nun, who was also a nurse, coldly informed me that my baby had died,” she says.

They would not let her have her son’s body, nor would they tell her when the funeral would be.

Did she not think to question the hospital staff?

“Doctors, nuns?” she says, almost in horror. “I couldn’t accuse them of lying. This was Franco’s Spain. A dictatorship. …”

“The scale of the baby trafficking was unknown until this year, when two men – Antonio Barroso and Juan Luis Moreno, childhood friends from a seaside town near Barcelona – discovered that they had been bought from a nun. “

The scandal is closely linked to the Catholic Church, which under Franco assumed a prominent role in Spain’s social services including hospitals, schools and children’s homes.

Nuns and priests compiled waiting lists of would-be adoptive parents, while doctors were said to have lied to mothers about the fate of their children.

The name of one doctor, Dr Eduardo Vela, has come up in a number of victim investigations.
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In 1981, Civil Registry sources indicate that 70% of births at Dr Vela’s San Ramon clinic in Madrid were registered as “mother unknown”.

He refused to give the BBC an interview. But, by coincidence, I had recently given birth at a clinic he founded, so I was able to book an appointment with him.

We met at his private practice in his home in Madrid. The man painted as a monster in the Spanish media was old and smiley, but his smile soon disappeared when I confessed to being a journalist.

Dr Vela grabbed a metal crucifix which had been standing on his desk. He moved towards me brandishing it in my face. “Do you know what this is, Katya?” he said. “I have always acted in his name. Always for the good of the children and to protect the mothers. Enough.”

Babies’ graves have been dug up across the country for DNA-testing. Some have revealed nothing but a pile of stones, while others have contained adult remains.

Are these crimes limited to Spain?

If you’re not scared, you’ve not been properly briefed

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So, if Neal Stephenson, J.G. Ballard, Charlie Stross, and Mervyn Peake had collaborated on a movie about the near future of the global economy, perhaps we’d have something about Chinese property developers trying to create the perfectly blank fascimile of a mid-century European suburb in the outskirts of Shanghai, not too far from Ballard’s old concentration camp at the Lunghua airfield, when a massive financial crisis erupts across the Internet. After the Party shuts off access to the major banks, the developers turn to high yield paper traded in Hong Kong, until rates spike and even Hong Kong brokers won’t touch it no more. But plungers plunge, it’s what they do. Shark gotta swim. The music’s playing and while it’s playing, we’re dancing, as someone said.

That’s when they notice the people from Wenzhou, who have a deeply dodgy but robust store-credit network going back to the days when any private business at all was illegal and who knows, maybe even further, back to the chaos of the Civil Wars. They’re in all kinds of business so long as it’s shady and they look out for each other, and they lend money. You wouldn’t be that far wrong if you thought you’d seen them in the movies before, just not as Chinese. More pasta, less mantou. So they roll over the loans.

But this is all can-kicking; the ballroom days are over. Nothing goes quite like a bubble. And pretty soon the Wenzhou guys are in trouble themselves. Colourful identities in shoe-biz are hopping out of tall buildings and pizza-ing the sidewalk. And here’s the kicker. You kick loans out the front door, you gotta turn them over out the back. The deal is the same for Citigroup and dodgy bookies. So they set up “trusts” with big names and float them in Hong Kong…and the Royal Bank of Scotland is a big investor.

No. No. That’s not the kicker. The kicker is this – the big deal, the hacienda if it hadn’t been a nightclub, the daddy, is a whole suburb designed by one Albert Speer.

I’m making none of this up. It’s not old man Speer, of course – it’s his son, also an architect like his grandad and his great-grandad, who was commissioned to build a German town in Shanghai’s globo-shed airport’n’datacentre belt. Trouble, he took that mean they wanted a town like a real German town, all post-war and either Christian or Social Democratic and square and energy efficient. They wanted Rothenburg ob der Tauber, or at least a lot of flickwerk fachwerk. Old Speer would have wanted something different – waiting for the end, he imagined he’d rebuild Germany in aluminium prefabs built by the idled Junkers aircraft industry, very Bucky Fuller, and even tapped up some of his staff to join him in his new practice.

About the Chinese property bubble and the increasing role of the mob, here’s Pat Chovanec. You’ll observe he’s getting a wee taste of the wumaodang in comments.

On Wenzhou and the property bubble, and spiking rates for speculation on margin like in ’29, JamesP at Jamie Kenny’s place. Some more general dread.

Here’s China Daily on sweatshop shoemaker-loansharks dropping out of skyscrapers. Wenzhou sounds like a mashup of Sicily and Leicester. With Chinese people. (Here, take one of these tabs, it’ll make sense.)

Here’s Bloomberg – hey, Bloomberg, even AFOE readers take that seriously – with great detail on Chinese shadow banks and RBS. More RBS, from the FT.

Finally, all that stuff about weird buildings and Albert Speer? I wasn’t kidding. Der Spiegel, auf deutsch. You bet.

That’s how it worked out for Sweden

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At Crooked Timber, they’re discussing a Tobin tax. Andrew F. asks:

How well did this work out for Sweden?

In the ruins of the city once known as Stockholm, ragged survivors barter rotting fish for scraps of used toilet paper outside the scorched hulk of the former Riksbank, that was once the oldest central bank in the world. Many have hacked out their own eyes with shards of plastic rather than see the desolation and depravity they brought upon themselves. “Would we hadn’t done it! The Tax that Dare Not Speak Its Name has reduced us to things lower than beasts!”

Elsewhere, corpses litter what were the chic alleys of hipster Södermalm, marking out the last desperate and insane brawls over crispbread and Cheap Monday products, clearly fought to the knife or rather to anything that would take an edge, in that grim night without darkness.

In the darkened concrete bunkers of what used to be one of the world’s largest Internet exchange points, Netnod, we found the rotting bodies of sysadmins still surrounding a router that appeared to have exploded, as if some sort of wave of pure evil had exploded across the wires from the hearts of a million bloggers the moment the first transaction tax was assessed.

And they tell me it’s worse in Skane. That’s how it worked out for Sweden.

(Although, the Greek source quoted here seems to be thinking along the same lines:

“If we default, it’s not just the domino effect. It will make Argentina look like small game. This place will become worse off than Bangladesh. People will be killed for a sandwich as they cross the road. It will be that bad.”

)

Sunshine club members’ newsletter…

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From William Keegan’s column in the sadly reduced business section of the Observer, a newspaper that used to be worth buying just for its business section, it looks like the sunshine club has got another member, ex-MPC man Christopher Smallwood of Lombard Street Research:

In Lombard Street Research’s Monthly Review for September, the economist Christopher Smallwood reminds us that “a currency system with Germany at its core necessarily displays a strong deflationary bias. For a monetary union to work well, it needs to be operated on the basis of ‘symmetrical obligations’ among the members. But if the strong surplus country is perpetually unwilling to take expansionary action, all necessary adjustments within the system have to be made by deficit countries taking deflationary action.”

Smallwood points out that Greece, Portugal, Spain and Italy have suffered a rise in costs relative to Germany and some of the northern economies of up to 30%….

Meanwhile, the BANKERS! remind us that something like 15% of German GDP is accounted for its intra-eurozone trade surplus. Also, note that Jürgen Trittin and the Greens are calling for a Northern European fiscal reflation, according to the transcript of the EFSF debate.

Speaking of the Observer and bankers, Heather Stewart quotes the IMF:

“The large number of ‘underwater’ mortgages poses a risk for a downward spiral of falling house prices and distress sales that further undermines consumption and labour mobility,” it warned, calling for courts to be allowed to write off a proportion of mortgages where borrowers have got themselves in trouble; for the taxpayer-backed mortgage guarantors Fannie Mae and Freddie Mac to encourage writedowns; and for an extension of state-level programmes to support troubled homeowners.”

The IMF is now arguing for unilateral cramdown by the GSEs.

Review: Tinker, Tailor, Soldier, Spy

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What would it be like if a Swede made a classic British spy movie? Well, we found out.

One of the things I liked most about this version of Tinker, Tailor… was that it was a visually convincing portrayal of Britain. The cinema is always in the business of constructing a mythic past or present, and in the UK, there are basically four historical eras in the eyes of the movies. One is Will Shakespeare and before, the age when everything was brown except the crown jewels and the sword blades. Another runs from the deer parks of the 18th century to the 1930s and basically celebrates everything posh. It’s the world of Mary Poppins and a million takes on Jane Eyre. Then there’s Blitz Grim, which runs from the outbreak of war through to the miners’ strike or thereabouts as if the bombs had never stopped falling. And then there’s Shiny World, which picks up in the late Thatcher era and runs through to now.

The problem with this is that the UK is the only European country where the post-war consensus is depicted as looking like shit. I suspect that class is behind this; the people who weren’t rolling in prosperity and unrivalled possibility in those years were exactly the old-fashioned upper middle class that gave us someone like Control as played by John Hurt, a pseudo-academic spook in a studiedly tatty silk near-kimono. He doesn’t dress like that because he’s poor, after all, but because he can. Smiley and his colleagues are much the same, marinating in cod-Oxbridge shabby-library kitsch in chilly flats in Hampstead, plunging into Highgate Ponds, dressing in expensive-but-fashionless tailoring.

But Tomas Alfredson shows early 1970s London as a city with tatty look-and-feel but fleets of brand-new cars (hey! it was the golden era of the British sports car! nobody feels existentially crushed by decline and runs out to buy a MGB roadster!), ruled by a government with uncared-for buildings but a more than generous budget for the technology of spookery and bureaucracy. This suggests he may have read a book or two before starting out. In fact, the intelligence world’s budget is nothing as to Alfredson’s budget for sets – the enormous, hugely detailed archives and secure conference centre are amazingly impressive, and permit him to put the audience in the point of view of a highly classified file making its way through the system.

Of course, London is always like that. There is a long history of new arrivals writing about the noise! and the smog! and the prices! and how do they live like that! and then, in their next letter home, declaring that all their friends had better hurry up as it might not last. These days, Smiley might have moved his skunk-works mole hunt into a Regus serviced-office block in Shoreditch rather than a rotten railway hotel around the old Broad Street station. The paranoia would have to float through the air conditioning in the spirit of J.G. Ballard rather than give the walls uncanny life in that of M.R. James. But it wouldn’t be all that different.

Neither would the politics, in some ways. One reading of the plot is that the loyal British spies and the pro-Soviet moles are in a sort of unconscious conspiracy. The original scheme is to get information from a Hungarian defector that will induce the Americans to share more intelligence with the British. But the moles, who are deliberately providing the British with information to get them to keep the defector case running, also hope that the Americans will be impressed enough to share, so they can get their hands on whatever they do share. After all, the British are deliberately passing information back to the Hungarians to protect the agent’s cover. In what way, then, are their aims actually opposed? The distinction between loyalty and betrayal is a question of the terms-of-trade.

Interestingly, we now know that while John Le Carré/David Cornwell was writing the book, the whole issue had blown up and the Americans had cut off signals intelligence sharing with the UK over prime minister Edward Heath’s refusal to let SR71 reconnaissance flights over the battles of the Yom Kippur war land at the British base in Cyprus. Specifically, Heath and his foreign minister Alec Douglas-Home were concerned that the Americans would pass the information to the Israelis, forcing the UK to take sides in the conflict. The Americans refused to give this assurance and the landing rights were refused, and the US flew the missions anyway using dozens of air-to-air refuelling tankers. As it happened, the Israelis weren’t being entirely honest with the Americans in exchange for the use of the photos, and the Americans were severely embarrassed, leading them to patch up the row with the UK quickly once it was all over.

So the British and the Russians (including the Hungarians) are willing to go to any lengths in order to influence the Americans. The other big target is of course the British Government, specifically the Treasury and SIS’s parent ministry, the Foreign Office. Ironically, the moles are as keen as the loyal to fight the good bureaucratic fight, and both sides want to do so by scoring off the Americans. If anything they mistrust the mainline civil service even more than they do Karla. There is a brilliant moment when the suspected mole, Alleline, spits at a senior civil servant that “None of your civil servants lost their lives!” – in Britain, the intelligence and diplomatic services are technically “crown servants”, without the independent professional status or final access to the highest peaks of power reserved for the civil service proper.

There are other things that haven’t changed much. Gary Oldman’s diction was so perfectly establishmentarian that I missed the first reference to what sounded like “Pseare” but was of course SERE, the survival, evasion, resistance to interrogation, and escape training course that Donald Rumsfeld’s agents re-purposed to create a wholesale torture capability after 2001.

Some other points…who didn’t love the government minister, very much the motorway-building go-ahead bulldozer of the Heathite Tory imagination, who plays a vigorous bout of squash in his Fred Perrys and immediately afterwards sparks up a gasper? It was also hard to avoid thinking that it was the Cold War that made Britain European, a time of civil service linguists and the BBC World Service. And finally, this is a slow movie, as slow as paranoia, well likened to the Godfather. Time stacks up, thickens, intensifies.

Revisiting the Eurodebate

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This post of P O’Neill’s made me think of something. That is, the British debate on joining the Euro, and on Europe more generally. I was strongly pro-Euro, something which now looks as bad a decision as joining the Liberal Democrats was. It’s hard to avoid the conclusion that had the UK had Eurozone interest rates in the 2000s, we would have had an even huger housing bubble and even more gigantic bank balance sheets, and we would have had to resolve them without being able to use the central bank as lender of last resort, and we would have been unable to devalue the currency as a stimulus mechanism.

Any counter-argument requires that the influence of the Bank of England in ECB policy would have been both powerful and right. The first is debatable, but we have to accept that the Bank didn’t restrain the housing bubble and also failed to respond to the crisis in the real economy in 2008, sitting on its hands and mumbling about inflation while the labour market cliff-dived and the bank regulators across the corridor frantically juggled with Halifax-Bank of Scotland, Lloyds, and Northern Rock. Also, the early 2000s situation of a bubbly periphery and a stagnant core would have been even worse with the London housing market in the Euro, and it’s hard to say how that would have panned out.

But what were we really debating in the 90s?

The arguments in favour, at least the economic ones, were that we might benefit from being fully integrated in a bigger trading bloc, that we would benefit from currency stability, that lower interest rates would be nice to have, and that the Eurozone restrictions would be a force that would require industry to be more competitive (or did they just mean lower wages?). The arguments against, at least the economic ones, were that the Stability & Growth Pact would be an anti-Keynesian force for deflation and that the option of devaluation would be removed.

Then there was a whole lot of other stuff. A lot of the “for” side thought it would make us more European and meant by this that it would make us more social-democratic (or Christian-Democratic, or even Free Democratic), although I don’t think any of them could have articulated a mechanism by which this would happen. I suspect that for a lot of us it was a bit like the Estonian MP who told Tim Garton Ash that “Europa ist…nicht Rußland!”, or in our case, Europe was not-America.

A lot of the “against” side seemed to agree with the idea that joining the Euro meant the triumph of social democracy, because they at least claimed to think that the European Union was an inherently socialist institution. Some of them still think this now, when it has imposed structural adjustment on three European countries in order to avoid the nightmare of fiscal expansion in Germany. Others took the Friedmanite line that currency adjustment was a form of free market competition and therefore desirable. This was at least defensible. And others thought that it was a scheme to redraw the UK’s internal borders or replace the flag or something.

The interesting contradiction here was that the same people who worried that we would be unable to devalue the currency were also fervent austerians who didn’t believe in demand management of any kind. It was as if they believed in hardcore new classicism up to the point where it affected their re-election. How could it happen?

Obviously, whether you felt the SAGP would be useful discipline or an anti-Keynesian straitjacket simply depended on whether you expected the economic problem of the 2000s to be inflation or deflation. But the economic argument that was very rarely discussed was the one that is now fascinating everybody – exactly how the Eurosystem, rather than the Euro, would function in a financial crisis. Apparently this was discussed in specialist circles, but it didn’t make even the best of the national press.

To sum up, I agree that the yes side was wrong about fixing the currency. To be honest, when asked, I always said I was in favour of joining if we could join at a significantly lower exchange rate. The benefits of which Jaguar-Land Rover just demonstrated. But this is a cop-out on my part. On the other hand, I think the Eurosceptics and some of the conservative Europhiles should accept that they were wrong about the SAGP – yes, Virginia, inflation was a phantom menace, and the ghosts of 1929 were not finished with us. And we can all agree that we were all wrong about the banking and financial aspects of the Eurosystem, in that we didn’t even bother to argue about them.

I promised to blame somebody in the last post. Here it comes: the key European politicians, especially the French and the Germans and the European Commission officials, who designed the Euro and the Eurosystem. They created a system that had a structural deflationary bias in an era of deflation, one that delivered rock-bottom interest rates to countries in the grip of land fever, and one that couldn’t cope with a banking crisis although it included the biggest banking system in the world. And then they kept putting up interest rates. What’s worse is that they now have the gall to give lectures about virtuous savers – even when they are the same individuals, like Wolfgang Schäuble, who were in power in the 1990s.

Yes, the banks are to blame

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Daniel Davies’s effort to become the most popular man in Britain has, apparently, not developed to his advantage, to quote the Emperor Hirohito. It struck me that there are two opposed explanations for the unusual toxicity of the comments thread that ensued, and they tell us quite a lot about the Great Bubble and the Great Recession that followed.

The first would be Daniel’s explanation. Look at them! It took only six comments for someone to analogise him to a soldier whose commander pays him in whiskey and delta 8 vapes to cut the ears off prisoners, and sixty-five for someone to compare him to one of the anonymous organisers of the Holocaust. We got to Josef Stalin by comment 115 and to Megan McArdle by 108. Surely, this is evidence that there is an unreasoning and unproductive rage around at anything that smacks of banks, bankers, or banking.

The second would be mine. Fans of Daniel Davies’s work since the distant era of Adequacy.org will appreciate that he is a practised and expert troll, and distinguished among the guild of ancient Norwegian bridge-guardians by the fact he can turn it on and off as desired. Knowing that bankers are unpopular (were they ever popular?), and that Crooked Timber is a website full of left-wing people, he crafted a post that would cause them all to freak out amusingly.

You will of course notice that the basic distinction here is that one explanation is demand-driven and one supply-driven. The first assigns agency to the buyer, the second to the seller. The distinction is important in economics – one of the most standard assumptions is that consumer sovereignty holds and that firms are generally price-takers. Another key assumption is that industry fundamentally responds to demand. Electrical engineers would say that it is load-following, like a power plant whose output can be throttled up or down to respond to the needs of the grid.

In itself, this isn’t controversial. Industries produce what they can sell. There are lags in the supply-chain, and it’s possible to have temporary shortages or surpluses, but basically, the rate of production is both constrained and driven by demand. But the stronger form of this argument, and the one that is baked into essentially all economic models, is that not just the quantity of goods, but also their quality and kind, is demand driven. The distinction between drivers and constraints is important here. It is obvious, and trivial, to say that things nobody will buy won’t be produced for very long. But that is only half the argument.

How did we decide to try making fireguards out of chocolate, or self-certifying mortgages with negative-amortising interest rates, in the first place? Obviously, there are cases where new products do respond to an identifiable demand. At the level of the whole economy, though, this implies that every conceivable product or service already exists in latent form in the minds of customers, as if there was a statue in every block of stone waiting to get out. This is…somehow implausible and unsatisfying. Among other things, it has the curious consequence that being really true to the core assumptions of economics implies eliminating the role of the entrepreneur, at least as an inventor or product designer rather than as an operational manager.

If entrepreneurs are a thing, on the other hand, we have to accept the possibility that firms have agency in structuring the markets they sell into, that even if aggregate supply doesn’t create its own aggregate demand, it is possible for specific supply to create its own specific demand. It’s Milan fashion week, after all – an institution exquisitely dedicated to the proposition that producers can at least try to define what consumers will want.

Now, back to the mortgage market. Mortgage brokers are a fine example of a business that really is demand-driven. People come to them and say how much house they are trying to buy, and the broker tries to find someone who will lend them the money. As they were both in competition as firms, and usually rewarded on commission as individual workers, their structural incentives were to follow the housing market wherever it went. In that sense, property buyers had real agency and hence culpability. The broker/originator sector was also meant to evaluate their creditworthiness, but as it didn’t take the risk on the loans itself, it didn’t have any incentive to turn people down. It had agency, and therefore also blame.

But what about the banks? Just treating them as a normal business is illuminating. Businesses invent new products all the time – sometimes following demand, sometimes reaching ahead of it. Sometimes, what they invent is dangerous to the public and they have to be restrained. Nobody would argue, for example, that in inventing the RBMK nuclear reactor, the Soviet nuclear industry wasn’t berserkly irresponsible and directly to blame when one blew up.

And one product the banks surely did invent was outsourced mortgage-servicing. This practice may yet prove to be one of the most pernicious of the Great Bubble, not because it led to illegality as such (although there’s plenty of that), but because it is a major obstacle to recovery, and it is the more profitable the longer it stays that way. When lenders were responsible for collecting payments and dealing with borrowers themselves, they were much more likely to be reasonable with borrowers who struggled to keep up the payments. They had good economic reasons for this; typically, they would recover much more of their money in a negotiated settlement than in a foreclosure, an expensive process in itself that usually ends with the property going for auction at a fire-sale price.

But once the servicing function is outsourced, the incentives are actually reversed. Not only does the servicer, the party who has direct contact with the borrower, have no incentive to agree a modification of the original loan, they have every reason to insist on foreclosure. They get paid based on the tasks they carry out, and foreclosure generates a lot of lawyering and letters, all of them chargeable to the lender.

Now, there are three ways out of a balance-sheet recession. One is economic growth itself. As, I recall, Daniel Davies once said, if you are in debt as an individual, the best solution of all is to increase your income if it is at all possible. And the Kulmhof-Ranciere study argues that increasing real wages is the best way out of the crisis at the macro-level. Another is inflation. And the point has been made, by one Daniel Davies among others, that inflation is a rather simple mechanism to adjust all sorts of contracts that were set at nominal prices that have become unpayable, one which avoids all the complex machinery of courts and loan officers.

And a third is bankruptcy, in which we recognise by law the fact that both the lender and the borrower agreed on a contract that has become impossible to honour, and both of them share in the cost of cramming it down to a realistic level. Here is a case in which a major new product invented by the financial sector, in advance of demand, is directly blocking one of the three roads to economic recovery. To what extent the banks are responsible for the lack of progress on the other two is left as a topic for discussion.

In my next post, I’m going to look at some more people who are to blame. They are not Greek schoolteachers.

International Talk Like a Berlin Parliamentarian Day

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With further proof that a five-party system is much more fun for analysts than for candidates or for governance, city-state elections in Berlin put out the previous coalition, returned the personally well-liked mayor, decimated a party that was a long-time kingmaker in West Germany, and put members of the Pirate Party into a German state legislature for the first time. Just in time for pirates’ international holiday.

Klaus “und das ist auch gut so” Wowereit (Social Democrat, SPD) will continue to serve as Mayor of Berlin, a post he has held since June 2001. The Free Democrats, who played a crucial role in the three-party system of West Germany, appear to have polled less than 2% in this election. In 2006 they won more than 7% of the vote and gained 12 seats; they will have none in the coming parliament.

The Left Party, post-communists and often prominent in Berlin, lost four seats and can no longer serve as a junior coalition partner to the Social Democrats. The Greens thought they might win the mayoralty, after gaining their first state premiership earlier this year in Baden-Württemburg. Though they gained 4.5% and six seats, they will at best be a junior coalition partner. The SPD may also choose to govern with the Christian Democrats (CDU). In the past, this would have been called a grand coalition, but with the second-place CDU polling just 5% more than the third-place Greens (and indeed none of the parties pulling in more than 30% of the vote), it’s hardly a sweeping coalition. Look for a Red-Green government, but with the SPD clearly in the driver’s seat because it has other options.

And then there are the Pirates. Their success in this election is, first, a reminder of electoral volatility at the state level. Anyone remember the Schill Party? Second, it’s a sign that the Greens have a generational problem. Post-materialist voters have tended to be Green voters, but the issues that drew people to the Greens 25 and 30 years ago aren’t as salient now. I’d like to see some polling on how many Pirate voters are first-time voters; I’m willing to bet it’s a high percentage. Third, it may be a signal that the FDP is well and truly toast in Berlin. The kind of discourse about freedom that the Pirates have embraced is something that the FDP could have taken up, but has proven too hidebound to do. Fourth, the Berlin tech-computer scene is engaged, experienced and has both a long history and a deep bench. The city is the home of the Chaos Computer Club and the first location for Blinkenlights, among many other highlights. There’s a big natural constituency for the Pirates, and they turned out. Fifth, digital issues and a diffuse sense of protest can motivate nearly 10% of an urban electorate. That’s enough to tip some more elections. Arrrr.

like loyal, faithful dogs

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I don’t find it particularly surprising that some of the people freed by police after allegedly being kept as slaves at a travellers site say that they wanted to be there. For one, thing, that doesn’t tell you anything about what would have happened if they had tried to leave and been caught.

And there are a whole number of reasons why people picked up from soup kitchens and homeless shelters being kept as slaves might have found their situation preferable to the one they were in before. They had regular accommodation, no matter how squalid. They were wanted, if only for forced labour. As the local MP pointed out, they will have worked out there where everybody could see the condition they were in – and nobody apparently thought that worth remarking on. They had a reliable, if reliably inadequate, food. Perhaps some of them were made into pets, or even given a kind of kapo status. They had regular company. Above all, people can be treated much worse than they were allegedly treated and still behave like loyal, faithful dogs. Rebelling against your condition, as the people who escaped and complained to the police did, is entirely natural. So is accepting it. Neither acts determine what your actual condition was in the first place.

And it should hardly be so surprising that people accept the idea they have to work in order to receive the means of basic sustenance when this notion forms a large part of government policy on unemployment.