You Can't Read This Book: Censorship in an Age of Freedom (20 page)

If a whistleblower had gone to journalists privately, there is no guarantee that they would have listened to him, because the same forces that were boosting high finance were destroying good financial reporting. In the 1840s,
The Times
thundered against the railway mania which ruined so many Victorian investors. In the 1990s, the
Economist
heaped scorn on the boosters of dotcom stocks, and won many admirers for its forthright journalism. In the 2000s, not one of the media organisations that covered business – not the
Wall Street Journal
, Bloomberg News, the
New York Times
, the
Economist
,
Forbes
, the
Financial Times
or, I should add, the mainstream British press and the BBC – saw a crash coming, or campaigned for a change in regulatory policy. Individual journalists served their readers well, but to pretend that the writing of Allan Sloan of
Fortune
or Gillian Tett of the
Financial Times
represented the media is like pretending that the work of Rajan and Roubini represented the collective wisdom of economists and financial analysts.

A post-mortem examination by the
Columbia Review of Journalism
noticed an alarming deterioration in the ability of reporters to investigate the wealthy and hold them to account. In the early 2000s, the American press printed much it could be proud of. Journalists found stories worthy of Upton Sinclair or Émile Zola as they exposed how Lehman, Citigroup and other Wall Street banks were throwing money at poor Americans to generate securities from sub-prime debt. The most haunting was the tale of an illiterate quarry worker who was already $1,250 in debt because he had borrowed money to buy food. Citigroup’s sub-prime subsidiary bought the debt and convinced him to refinance ten times in four years until he owed $45,000, more than half of it in fees. Repayment took more than 70 per cent of his income.

Such was the rock on which Alan Greenspan and George W. Bush built their economic miracle. Here were the ‘economic fundamentals’ that underlay Gordon Brown’s boast that there would be ‘no return to boom and bust’.

As the market went manic, it left the press behind. Wholesale fraud and forgery were rampant. Wall Street’s demand for mortgages became so frenzied that managers expected female wholesale buyers to trade sex with retail brokers for securities. Bank underwriters, who approved mortgage loans, demanded bribes from wholesalers before they would pretend that the deals were prudent. Yet the American press ignored the wave of white-collar crime, and offered its readers pap pieces in which reporters praised the dynamism of CEOs and gasped like porn actresses at the size of their bonuses. Every bubble market captures journalists as it captures regulators and investors. The longer a speculative mania goes on, the more normal it seems. Journalists who ignore the euphoria that grips their colleagues and warn that the collapse will be all the worse when it comes risk hearing their editors tell them that they are bores who are not worth publishing. ‘Where’s the crash you promised me? Where’s my story? All I can see are happy people out there working hard and making money.’

The
Columbia Review of Journalism
found other reasons for the media’s inability to anticipate the crash of 2008. The decision of the Bush administration to call off the regulators, copied by Gordon Brown in Britain, was the most prominent among them. Regulators had provided reporters with leads. Once they dried up, the stories dried up as well. To anyone who worked on a newspaper in the early 2000s, however, one reason the
Review
gave for the failure of journalism rang as true as a funeral bell: ‘The financial press is … a battered and buffeted institution that in the last decade saw its fortunes and status plummet as the institutions it covered ruled the earth and bent the government.’

The instant electronic communications that allowed speculators to deal globally were destroying newspapers’ business models by taking readers and advertisers away to the free sites of the Internet. A whistleblower who risked the sack and went to an old media institution with a possible story could not be sure that it would have the resources to follow the lead. The British media faced the further fear of libel actions. Fred Goodwin threatened to sue the
Sunday Times
for saying that he had wanted his own private road built from Edinburgh airport to RBS’s Scottish headquarters, and had tried to jump the waiting list for membership of an elite golf club. The legal action never came to anything – the golf club backed the newspaper, and confirmed that Goodwin’s ‘people’ had passed on words to the effect of ‘Do you know who I am?’ But as the decade progressed, newspapers that could see money haemorrhaging from their balance sheets could not afford to accept the costs of taking on the plutocracy’s lawyers.

Nor were the British and US governments interested in learning the truth from insiders. The nominally left-wing Tony Blair, Gordon Brown and Bill Clinton, as well as the confidently right-wing George W. Bush, were certain that the best regulation of finance was less regulation.

One of the few honourable men monitoring the crazed market that followed was Paul Moore, the risk manager of the Halifax, a bank whose history tracked the decline of British self-reliance. It had once been a mutual building society formed by respectable working- and lower-middle-class families in Victorian Yorkshire to pool their savings and allow them to buy homes. Margaret Thatcher – who, contrary to myth, was the enemy of the best Victorian values – allowed the building societies’ managers to enrich themselves by converting the mutuals into banks. The Halifax merged with the Bank of Scotland (which was not the same institution as the Royal Bank of Scotland, but was just as spivvishly managed), and the new company spewed out mortgages.

As its risk manager, Moore was under a legal duty to ensure it behaved prudently. He found a hyperactive sales culture. Managers rewarded sales teams if they sold mortgages, and mocked and demeaned them if they failed to persuade punters to take the bait. Moore thought that there ‘must have been a very high risk if you lend money to people who have no jobs, no provable income and no assets. If you lend that money to buy an asset, which is worth the same or even less than the amount of the loan, and secure that loan on the value of that asset purchased, and then assume that asset will always rise in value, you must be pretty close to delusional. You simply don’t need to be an economic rocket scientist or mathematical financial-risk-management specialist to know this.’ When he tried to make the case for responsible lending, one manager told him he could never hit his sales targets if he behaved ethically. Another leaned across a desk and said, ‘I warn you, don’t make a fucking enemy out of me.’

Moore was a Catholic gentleman, who was educated at Ampleforth and trained as a barrister. He saw no conflict between business and morality. He went to the board and warned that its demand for sales growth at any price was putting the company at risk. The board received him warmly. A month later, the chief executive, James Crosby, called him to his office.

‘I’m doing a reorganisation, and your job is being made redundant,’ Moore remembered him saying.

‘My job cannot be made redundant,’ replied Moore. ‘It is a regulatory requirement to have my job.’

‘You lost the confidence of key executives and non-executives.’

‘Who?’ asked Moore.

‘I don’t have to explain myself to you,’ said Crosby.

The subsequent fates of the two men encapsulate the perverse incentives the Western financial system offers. Moore left Crosby’s office bewildered. ‘It was a terrible shock. I felt absolutely devastated. I went outside on the street and just cried. A million thoughts going through my head. How am I going to tell my wife? How am I going to tell my kids? What are people going to think of me?’

HBOS paid him off. Not one headhunter phoned him to sound him out for a job, even though he was one of the most experienced risk managers in Britain. He had broken the
omertà
of a hierarchical culture, and rendered himself unemployable.

In his spare time, and he had plenty of spare time, Moore conducted a survey of 563 risk managers about the causes of the financial crisis. ‘Most risk professionals saw the technical factors which might cause a crisis well in advance,’ it concluded. ‘These included easy availability of global capital, excessive leverage and accounting standards which permitted over-valuation of assets. The risks were reported, but senior executives chose to prioritise sales. That they did so is put down to individual or collective greed, fuelled by remuneration practices that encouraged excessive risk-taking. That they were allowed to do so is explained by inadequate oversight by non-executives and regulators, and organisational cultures which inhibited effective challenge to risk-taking.’

James Crosby went to Buckingham Palace to meet no less a personage than Her Majesty the Queen. Gordon Brown had instructed her to knight Crosby for his services to the financial industry, as he had asked her to knight Fred Goodwin and Alan Greenspan before him. Crosby’s decision to sack Moore and carry on lending as before had been endorsed by his senior colleagues, auditors and the financial regulators. Trapped in the group-think of a bubble market, no one in a position of responsibility could guess how a strategy of borrowing on the wholesale markets to fund an exponential growth in a bank’s loan book could possibly go wrong. Fresh honours followed. Brown appointed Sir James, the manager who had sacked his risk manager for warning of risks, to the financial regulatory authority that was supposed to guard against risk. There Sir James remained until HBOS went bust in the crash, and Moore forced him to resign by going to Parliament to reveal all.

With millions in excessive debt and millions jobless, one might have expected a surge of protest against managerialism and hierarchy. By the autumn of 2011, the banks had received almost £1 trillion in subsidies in the form of cheap Bank of England loans and deposit and debt guarantees, given by the state on condition that they improved lending to British businesses. The banks took the money, but did not lend, because there were no easy profits or easy bonuses in business loans. The most unjustly rewarded executives in the world had wrecked Western economies and shown no willingness to change their ways. Yet it never occurred to the supposedly liberal-left governments of Barack Obama and Gordon Brown to provide incentives to allow employees to speak up and speak truthfully, or to impose penalties on those who stayed silent. Governments did not promise to provide full compensation to bankers who revealed their corporations’ risky policies. They did not say that all bureaucracies, public as well as private, should allow elected workers’ representatives on their boards, who might provide a fair hearing to those who suspected their managers were going haywire. They did not say that bailed-out banks should remain under accountable state control because the government could not do a worse job than the private sector. Nor was there irresistible public pressure on them to reform.

It was as if the citizens of the West did not want to know.

In most cultures for most of history, speech has not been free. Criticise the state, and the state punished you. Break with the religion or defy the taboos of the tribe, and the tribe punished you. The powerful cannot afford to lose face, because as soon as they do, the authority of the state and the tribe begins to drain away.

The democrats of ancient Athens John Milton admired were among the few to escape from hierarchical control. Citizens exercised
parrhesia
, which translates as ‘all speech’, or sometimes ‘true speech’. They had the right to say anything to anyone: to speak truth to power. Aristophanes mocked the city’s generals and demagogic politicians. They responded with lawsuits alleging that he was slandering the
polis
. Their threats did not silence Aristophanes, but provoked him into producing more satires. It sounds stirring, until you remember that women and slaves did not enjoy the freedom allowed to male citizens, and liberty in Athens as elsewhere broke down in moments of crisis. Frightened after their defeat in the Peloponnesian War, Athenian citizens sentenced Socrates to death for corrupting the minds of the young and – inevitably, given the persistent link between religion and censorship – for refusing to honour the city’s gods. For Xenophon and Plato, Socrates’ nobility lay in his refusal to flee from prison when the opportunity presented itself. He preferred accepting his punishment to showing a fear of death, and died a free man.

By drinking the hemlock, Socrates was truer to the Athenian ideal than were his persecutors. ‘To be happy means to be free and to be free means to be brave,’ Pericles said in his oration for the Athenian war dead, as he emphasised that ancient ideas of free speech have a notion of courage behind them. Citizens of modern democracies, who are at liberty to talk about politics in whatever manner they please, may find the insistence on bravery puzzling, but if they think about how careful they are to ‘respect’ employers and religious militants they will understand the link.

Michel Foucault believed that speech was truly free only when the weak took a risk and used it against the strong: ‘In
parrhesia
, the speaker uses his freedom and chooses frankness instead of persuasion, truth instead of falsehood or silence, the risk of death instead of life and security, criticism instead of flattery, and moral duty instead of self-interest and moral apathy.’

On Foucault’s reading, the worker who criticises his boss uses
parrhesia
. The boss who shouts down his worker does not. The woman who challenges religious notions of her subordination is a
parrhesiastes
. The priest and her relatives who threaten her with ostracism or worse are not. In the ancient Chinese story, the mandarin who knows he must tell the emperor that his policies are foolish orders carpenters to build him a coffin and takes it with him to court. Pericles would have approved.

So far, so commonplace. For who does not admire the brave dissident, and who does not flatter themselves into believing that they would be equally brave in the same circumstances? It is one thing to admire, however, another to emulate. Anyone who has worked in a hierarchical organisation must have noticed that bravery is rarely on display when a superior enters the room.

The best proponents of freedom of speech do not just demand courage. They say we must not only tell truth to power, we must also tell truth to ourselves. John Stuart Mill was more concerned about the self-censorship imposed by the received opinion of Victorian Britain than by the small British state of the nineteenth century. When he says in
On Liberty
that ‘If all mankind minus one, were of one opinion, and only one person were of the contrary opinion, mankind would be no more justified in silencing that one person, than he, if he had the power, would be justified in silencing mankind,’ he sounds like an intellectual reducing his argument to absurdity. But Mill, who had to fight the religious conformity of his day as well as the self-satisfied culture of Britain at its imperial zenith, meant what he said. The majority had no right to use social pressure to silence arguments, because without argument it could never be sure if its opinions were true: ‘Complete liberty of contradicting and disproving our opinion, is the very condition which justifies us in assuming its truth for purposes of action; and on no other terms can a being with human faculties have any rational assurance of being right.’ If an argument is false, then exposure produces greater trust in truth. If it is true, or partially true, then there is no case for repressing it. Censorship was the enemy of human progress.

Mill’s Victorian belief in progress strikes those who know the history of the twentieth century as naïve – although I note that parts of humanity have progressed in their treatment of women, homosexuals and the races Mill, to his shame, dismissed as ‘inferior’. Victorian liberals had the advantage over us in one respect, however. Because they believed that humanity was moving forward, they had few relativist qualms about saying that liberal society was better than what had gone before, and could be better still. For Mill, the decisive argument against censorship was that ‘ages are no more infallible than individuals’. Just as we now regard ideas that were the common sense of the past as false and ridiculous, so many opinions we now take for granted will strike the future as cruel and absurd. I believe that posterity will look back on our treatment of animals, and the insouciance with which we have presided over the sixth mass extinction of species in the earth’s history, and shudder. Even if I am wrong, I can be certain that, for ill as well as good, the ideas that some small and derided groups of men and women are discussing now will one day be in the mainstream.

Nor was Mill’s demand for openness utopian. Modern societies fit Mill’s ideal in several respects. The scientific method demands that its practitioners must be prepared to accept that they are wrong. A Nobel laureate cannot rely on his status to protect him from ridicule. If the evidence does not support his theories, he must either lose face and admit his error, or exclude himself from the debate. At their best, science and the humanities follow Mill’s dictum that ‘The beliefs which we have most warrant for, have no safeguard to rest on, but a standing invitation to the whole world to prove them unfounded.’ Democratic societies also expect their politicians to have thick skins. Elected leaders can rarely call out the police to punish those who subject them to criticism, even if their opponents are malicious, ill-informed and self-serving – as they often are. Nor, in most circumstances, can the citizens of democracies call on the law to punish those who produce arguments they regard as immoral, threatening, false or scandalous.
Parrhesia
brings many benefits. Democracy, science, intellectual excellence and the ability of citizens to live as autonomous adults depend on the right to criticise and accept criticism.

Let no one pretend that it is easy. Along with the bravery the Athenians recommended, which most people do not possess, Mill insists on an open mind, which most people do not possess either. We must not only be ready to make the powerful lose face, we must be prepared to lose face ourselves. We must not only run the risk that our country/tribe/confessional group will punish us for questioning its taboos. We must be ready to confront our own taboos, our idea of ourselves, and give people who may well be unhinged and spiteful a hearing. Few are prepared to do it. In Richard Landes’ nice phrase, most societies regard self-criticism at an ‘individual and collective level, as akin to chewing on broken glass’, and ‘have elaborate ways of enforcing silence’.

Beyond Mill lies Marx. Anyone who has engaged in political controversy will have experienced a moment of elation when they produce an argument that is so clear, so logical, so morally certain, so factually accurate and so elegantly presented that they cannot imagine how anyone could read it and fail to be convinced. It is best to get these delusions out of your system early in a writing career, because readers rarely accept arguments that challenge their interests. Even if they acknowledge at some level that there may be truth in what you say, they will blank out the unwelcome knowledge. By blanking out, I do not mean that they fall for one of the standard cognitive biases that push people into delusion and denial, simply that they decide that it is not advantageous to act on what you have said, even though they suspect that you may be right. Political information is not neutral. It always helps someone and hinders someone else. If you show that a conservative politician is corrupt or incompetent, conservatives worry that your work will help bring to power left-wing politicians who will raise their taxes. If you show that a left-wing politician is a charlatan, left-wing readers worry about the boost you are giving to conservatives who will reduce the welfare state on which they depend. During the Arab Spring, outsiders thought that once the subject peoples had risen up, the dictators would vanish like mist before the wind. As it turned out, the dictators had supporters, not just among servants of the regime who feared the loss of their jobs, but among those who preferred tyranny to chaos. China, the world’s most populous country, and Russia, the world’s largest country, are autocracies whose rulers convince a proportion of the population that it is better to blank out knowledge of their arbitrary abuses of power and concentrate instead on the deluge that could follow if their arbitrary power collapsed.

As we have seen, Westerners who know perfectly well that the God of the Torah, the Bible and the Koran is a fable nevertheless refuse to condemn the bigotry of the faithful for fear of provoking a violent reaction or laying themselves open to accusations of religious prejudice. Instead of denouncing oppression, they concentrate their energy on denouncing ‘new atheists’ and ‘enlightenment fundamentalists’ for voicing what they know to be true. Meanwhile, in any business or state bureaucracy, it is far from certain that a whistleblower will win the admiration of his or her colleagues. Even if their supposedly secret information is not false or is beside the point, even if they are not leaking commercially confidential information that an organisation has every right to keep private, their actions will damage their firm or institution. The scandal will delight its private or bureaucratic rivals, and in extreme cases threaten the whistleblowers’ colleagues’ income or jobs.

Employers, like kings, dictators, politicians, bishops, rabbis, imams, priests, civil servants, judges and censors, can urge their fellow citizens to shut up and forget for fear of the consequences.

Given the political, cultural, psychological and economic forces ranged against freedom of speech and freedom of the press, the wonder of free societies is not that they are rare, but that they exist at all. In these circumstances, one might have hoped a country that boasted of being a bastion of liberty would have protected its precious inheritance.