April 19, 2015
Crisis: Power Shift,  Google, TPIP, Jon Stewart, Universities' Death
  "They who can give up essential 
   liberty to obtain a little temporary
   safety, deserve neither liberty
   nor safety."
   -- Benjamin Franklin
   "All governments lie and nothing
   they say should be believed.
   -- I.F. Stone
   "Power tends to corrupt, and   
   absolute power corrupts
   absolutely. Great men are        
   almost always bad men."
   -- Lord Acton

Prev- crisis -Next


1. Power shift in America as Wall Street bows to Silicon

2. Google’s dominance faces a challenge at last. Shame it’s
     too late

Marriage Made in Corporatist Heaven Slams into

4. Jon Stewart: why I quit The Daily Show
5. The Slow Death of the University


This is a Nederlog of Sunday, April 19, 2015.

This is a crisis blog. There are 5 items with 5 dotted links: Item 1 is about a - claimed - power shift, that I am a bit more skeptical about than the writer (for a good reason); item 2 is about another somewhat strange argument about Google and the EU; item 3 is a good article about the TPIP; item 4 is a good article about Jon Stewart; and item 5 is about an article by Terry Eagleton on the death of the university, about which he is right - but it goes back far longer than he seems to think.

1. Power shift in America as Wall Street bows to Silicon Valley

The first item today is an article by Will Hutton on The Guardian:

This starts with the following summary:
Ingenuity and energy abound in tech companies, but they are trapped within traditional financial power structures
I quoted this because the title is somewhat interesting, while the summary consists of the clichés "Ingenuity and energy" and "traditional financial power structures" that also are extremely vague.

But OK - here is the beginning:
American capitalism is in the midst of a remarkable transformation. For decades, Wall Street has been the beating heart of the American system. Its great investment banks have driven the financialisation of the globe. It has become a byword for extravagant salaries, amoral deal-making and, infamously, nearly precipitating its own collapse.

The financial “masters of the universe” have made money from money on a scale never before witnessed, their values and priorities cascading over the US and the west. The ambitious graduates from the great American law and business schools have unquestioningly put a Wall Street career as their number one objective. US finance rules, or ruled, supreme. But the rise and rise of Silicon Valley and the second industrial revolution it represents has launched a challenge to the old order. It is becoming ever more obvious that digitisation, the internet and the supercomputer are reinventing the entire industrial, financial and business landscape in a process that is only just beginning.

Really now? I agree that the bankers have made incredible amounts of money, and that "US finance rules, or ruled, supreme", and I also agree that Google, Facebook, Apple and Microsoft have turned within the last 15 or 20 years into extremely rich and very powerful multinational corporations, but so far I have not read much about the - supposed - fact the new firms and the much older banks are teaming up.

This doesn't mean very much, for while I do keep up with the news and with good journalism, clearly there are many developments I do not know about (until they get written about by some journalist in one of the around 40 papers that I check every day to keep current with the crisis).

But the above is pretty vague. Here is some more:
Silicon Valley entrepreneurs have never trusted or liked Wall Street and its values very much. (...) Almost all the great west coast hi-tech giants – from Google to Linked In – have ensured that, while Wall Street can buy their shares, it can’t buy the accompanying controlling votes. Control stays with the founders, whose privileged shares often have 10 times the voting rights of the ordinary shares offered to Wall Street.
That is also not strong evidence, nor is the fact that Will Hutton can name two former bank managers who got bought - for respectively for $ 70 million and $ 64 million (each year, it seems) - by respectively Google and Twitter to oversee their finances.

But the following is somewhat better evidence, for this indeed suggests a broad trend:
The numbers of law and business school graduates from Harvard and Stanford leaving to work in technology companies is nearly the same as those choosing finance; on current trends, the crossover will be reached within two years.
Then again, I suppose the real reason is this:
The Big Innovation Centre (declaration: I am chair) is well advanced with its entrepreneurial finance hub that will allow entrepreneurs to better value their technology in order to get improved and faster deals from financiers.
That is: I think Will Hutton - who also is the principal of Hartford College, Oxford - wants to get rich or mega-rich as well.

This does not necessarily mean that he is mistaken, and I agree that the two richest and most powerful kinds of multinational corporations are the banks and Silicon Valley, while it also seems rather likely these will cooperate rather than fight, simply because this is in both their financial interests, but basically this
- rather vague - article seems to try to put
The Big Innovation Centre "(declaration: I am chair)" on the map.

And this also explains at least part of the reason that this is about the first time I read about the teaming up of big finance and big computing: Will Hutton is the chair of The Big Innovation Centre, and he seems to want to get (mega-)rich as well.

I don't mind, and he even may be right, but it does damage his objectivity and independence at least a bit.

2. Google’s dominance faces a challenge at last. Shame it’s too late

The next item is an article by John Naughton on The Guardian:

This starts as follows:
So the European commission has finally decided that Google may have a case to answer in relation to claims that it has been abusing its monopoly position in search. On Thursday, Margrethe Vestager, the competition commissioner, announced that the preliminary findings of the commission’s investigation supported the claim that Google “systematically” gave prominence to its own ads, which amounted to an abuse of its dominant position in search. “I’m concerned,” she said, “that Google has artificially boosted its presence in the comparison shopping market with the result that consumers may not necessarily see what’s most relevant for them or that competitors may not get the commercial opportunity that their innovative services deserve.” Google, which, needless to say, disputes these claims, now has 10 weeks in which to respond.

Yes, indeed. Here is a little more:

To those of us who follow these things, the most interesting thing about Thursday’s announcement is the way it highlights the radical differences that are emerging between European and American attitudes to internet giants.

This is also true - or at least some Europeans (still) have some laws and attitudes that the Americans lack.

But then we get a rather strange argument, that is presented as "a reflection of the way in which antitrust law has been gradually infected by neoliberal ideology":

Once upon a time, it was taken for granted that industrial monopolies were, by their very nature, intolerable for the simple reason that, as Lord Acton famously observed, power tends to corrupt and absolute power corrupts absolutely.

But then a radically different idea was injected into the legislative bloodstream by Robert Bork, a distinguished American lawyer, in his 1978 book, The Antitrust Paradox. One implication of Bork’s argument was that overwhelming market dominance was not necessarily a bad thing.

The reasons that this is a rather strange argument are that (i) saying that "overwhelming market dominance was not necessarily a bad thing" is extremely vague (for whom is it "not a bad thing"?! And "not necessarily"?!), while (ii) the argument in no way meets Lord Acton's argument.

In fact, what it amounts to is much like saying that the CEOs of the military- industrial complex have agreed that their dominance of the market is "not necessarily a bad thing". Of course they would say so - but so what?

Here is the conclusion of the article:

The only realistic conclusion, therefore, is that Google’s monopoly in search is a given, for the foreseeable future. It may be that the European commission will eventually conclude that the company has abused its monopoly of search to favour its own products and levy appropriate penalties. But even if it does so conclude, it will just be a sideshow because it will leave the central issue of Google’s power essentially untouched.

Another strange thesis, for the simple reason that what the European commission is trying to do it is not about diminishing Google's monopoly, but is about how Google conducts itself in Europe. And while I do not believe that the European commission will change much, it is right in maintaining that Europe is not the U.S., and that Google should conform to European laws. (Whether it will is another matter, that now is up to the courts.)

3. Marriage Made in Corporatist Heaven Slams into Resistance 

The next item is an article by Don Quijones on Wolf Street:
This starts as follows:

After eight rounds of secret negotiations, Washington and Brussels are still struggling to breathe life into the Transatlantic Trade and Investment Partnership (TTIP). According to current European Union President, Latvia, the chances of the agreement being signed by the year-end target are growing perilously slim.

The potentially game-changing trade deal is aimed at radically reconfiguring the legal and regulatory superstructures of the world’s two largest markets, the United States and the European Union – for the almost exclusive benefit of the world’s biggest multinational corporations.

Yes, indeed. There is also this (and if you want to know more about the report that is mentioned, use the last dotted link):
The report also warned that the case had yet to be made for the highly controversial investor-state dispute settlement (ISDS), a provision that elevates individual foreign corporations and investors to equal (or arguably superior) status with a sovereign nation’s government. If signed, it would allow companies to skirt domestic courts and directly “sue” signatory governments for compensation in foreign extrajudicial tribunals.
Quite so. And there is this:
If allowed to take universal effect, the system will impose above our governments a rigid framework of international corporate law designed to exclusively protect the interests of corporations, relieving them of all financial risk and social and environmental responsibility.
There is a lot more under the last dotted link, while you also should know (which isn't mentioned in this article) that Barack Obama is much in favor of the TPP and the TPIP, and also much in favor of fast tracking these through Congress, which means that these enormous legal, economic and social changes, that deliver nearly all powers in the hands of the big multinational corporations, are intended by him to pass Congress without being read by almost anyone (and they are hardly read, because they are secret and classified).

4. Jon Stewart: why I quit The Daily Show

The next item is an article by Hadly Freeman on The Guardian:

This starts as follows:
There was no one moment when Jon Stewart knew it was time for him to leave what he describes as “the most perfect job in the world”; no epiphany, no flashpoint. “Life,” he says, in the lightly self-mocking tone he uses when talking about himself, “doesn’t really work that way, with a finger pointing at you out of the sky, saying, ‘Leave now!’ That only happens when you’re fired, and trust me, I know about that.”

Instead, he describes his decision to quit The Daily Show, the American satirical news programme he has hosted for 16 years, as something closer to the end of a long-term relationship. “It’s not like I thought the show wasn’t working any more, or that I didn’t know how to do it. It was more, ‘Yup, it’s working. But I’m not getting the same satisfaction.’” He slaps his hands on his desk, conclusively.

“These things are cyclical. You have moments of dissatisfaction, and then you come out of it and it’s OK. But the cycles become longer and maybe more entrenched, and that’s when you realise, ‘OK, I’m on the back side of it now.’”

There is a whole lot more (the download is 326.3 Kb, although the first half of that is taken up by very many Javascripts) and it is written by someone who knows The Daily Show quite well, who also talked twice (recently) with Jon Stewart, and who likes both.

It is not written as an interview, although it is in part based on talks with him, but this is a good article.

5. The Slow Death of the University

The last item today is a - long - article by Terry Eagleton (<- Wikipedia) on The Chronicle Of Higher Education:

I had to look up Terry Eagleton, because while I had heard of his name, I could not quite place him. As you can find out from the Wikipedia reference that starts this item, it turns out he is an English Catholic Marxist literary critic and professor of English literature since decades, which indeed explains why I could not quite place him: I am a lifelong atheist; I am not a Marxist since 1970 (though my parents were, for over 40 years); and I generally don't care for literary criticism, though I like English literature (and especially that of 1750-1830).

Also, I selected this article initially because of its title and not its writer; because the title says what I also experienced, indeed already in the 1970ies when I started to study, though at that time not for the reason Terry Eagleton gives:

From Cape Town to Reykjavik, Sydney to São Paulo, an event as momentous in its own way as the Cuban revolution or the invasion of Iraq is steadily under way: the slow death of the university as a center of humane critique. Universities, which in Britain have an 800-year history, have traditionally been derided as ivory towers, and there was always some truth in the accusation. Yet the distance they established between themselves and society at large could prove enabling as well as disabling, allowing them to reflect on the values, goals, and interests of a social order too frenetically bound up in its own short-term practical pursuits to be capable of much self-criticism.  Across the globe, that critical distance is now being diminished almost to nothing, as the institutions that produced Erasmus and John Milton, Einstein and Monty Python, capitulate to the hard-faced priorities of global capitalism.

I note first that this is far more recent than the 1970ies, which is when I started noticing something like it in the University of Amsterdam; that - as Eagleton formulates it - it is especially about "the slow death of the university as a center of humane critique"; and that what I saw was considerably broader (but I saw it
while I was a student of philosophy and of psychology, rather than as a student of literature).

Second, one of the first things I noted, back in the 1970ies, is related to this considerably more recent fact that gets quoted in the article by Eagleton:

It is true that only about 5 percent of the British population attended university in my own student days, and there are those who claim that today, when that figure has risen to around 50 percent, such liberality of spirit is no longer affordable. Yet Germany, to name only one example, provides free education to its sizable student population.

For what I noted was that the University of Amsterdam was far more stupid than I had expected it to be, which may have been naive, and indeed was founded on the kind of background Eagleton quotes, for in Holland in the 1950ies and early 1960ies also at most 5% of the people who could study did study (mostly for financial reasons: there were very few study loans or grants).

Indeed, I found out some years later that the average IQ of the students of the University of Amsterdam in 1984 was 115 (which would have made it 20 years earlier almost impossible to enter or finish a university), while from Eagleton's figures it follows that everyone with a completely average IQ - 100 - now can attend and finish most British universities, and it will be similar in Holland these days.

In both countries, this was also accompanied or predated by an enormous decline
in the standards of education given to pre-university students:

Until the late 1960ies or early 1970ies one had, in Holland, to take exams in 3 or 5 foreign languages, and in mathematics, chemistry, physics, biology, history, and geography, each of which had to be passed by both a written and an oral exam; and 18-year olds had to pass 14 to 16 examinations to qualify as someone fit to enter a university.

From the early 1970ies onward one could qualify as a university student by passing 6 exams, with 1 foreign language, and could totally avoid mathematics, chemistry, physics, and biology, and qualify on - say - English, Dutch, history, geograpy and drawing, or some such package.

Clearly, that was the main difference I saw: Far more students, with far less good preparatory education, who were on average considerably more stupid than the students of the 1950ies and 1960ies and before. (And I do not blame the students: I try to lay out the facts.)

Also, much the same thing happened in England during the same years, as was very well explained in Brian Ford's "The cult of the expert" (from 1982!).

It is in the end this change - where everyone whose intelligence is firmly very average can get "a university degree", while there also were vastly many more students - that fundamentally changed the universities, simply because it made it impossible to teach anything that required a somewhat higher IQ (in Holland from 1865-1965 it took an IQ of at least 125 to be able to enter a university), simply because most who attended a university expected and demanded also to finish it.

And in Holland and England these changes started already in the later 1960ies, probably mostly propelled by the arrival of the baby-boomer generations.

Eagleton mentions none of these things, but considers the rather unique situation at the English Oxbridge universities (where he taught for some 30 years), and then says:

Elsewhere in Britain, the situation is far different. Instead of government by academics there is rule by hierarchy, a good deal of Byzantine bureaucracy, junior professors who are little but dogsbodies, and vice chancellors who behave as though they are running General Motors. Senior professors are now senior managers, and the air is thick with talk of auditing and accountancy. Books — those troglodytic, drearily pretechnological phenomena — are increasingly frowned upon. At least one British university has restricted the number of bookshelves professors may have in their offices in order to discourage "personal libraries."

I say - but I met something rather similar in the University of Amsterdam, although the explanation for the 1970ies and 1980ies is different:

What I faced was mostly utter indifference of the staffs for anything other than their own incomes and statuses, which is in part explained by the fact that they were about the last generation given tenure, and the first generation to have to cope with such great amounts of usually quite unbright students.

Then there is this:

In the midst of this debacle, it is the humanities above all that are being pushed to the wall. The British state continues to distribute grants to its universities for science, medicine, engineering, and the like, but it has ceased to hand out any significant resources to the arts. It is not out of the question that if this does not change, whole humanities departments will be closed down in the coming years.

Again, it is somewhat similar in Holland (though the funding of the universities is rather different).

Also, I should note that there is some justification for it: It are especially "the humanities" that appeal to the lesser "gifted" (who these days may have an IQ of on average of 105) while the brighter students select the more demanding subjects like "science, medicine, engineering, and the like".

And there is nothing that can be done about this, except locking the universities to everyone who scores less than 130 on an IQ test, which will not be done, and certainly not in Holland. [1]

Here is Eagleton's take:

As professors are transformed into managers, so students are converted into consumers. Universities fall over one another in an undignified scramble to secure their fees. Once such customers are safely within the gates, there is pressure on their professors not to fail them, and thus risk losing their fees. The general idea is that if the student fails, it is the professor’s fault, rather like a hospital in which every death is laid at the door of the medical staff. One result of this hot pursuit of the student purse is the growth of courses tailored to whatever is currently in fashion among 20-year-olds. In my own discipline of English, that means vampires rather than Victorians, sexuality rather than Shelley, fanzines rather than Foucault, the contemporary world rather than the medieval one.

I do not blame the students, though I agree that with an average IQ of 100, most of whom expect to graduate, and most of whom will graduate, very little can be given to their average that looks like "an ordinary university education of the 1950ies". (For that would be much too difficult for most.)

But this is also why I do regard the universities as dead, and indeed have done so from 1980 onwards: You just cannot teach academic subjects on a high academic level, if the average IQ of the students, most of whom have to graduate, is between 100 and 115 (whereas it was at least 125 in the 1950ies, when the students also were much better prepared when they entered university).

Here is more of Eagleton's take:

Subjects that do not attract lucrative research grants from private industry, or that are unlikely to pull in large numbers of students, are plunged into a state of chronic crisis. Academic merit is equated with how much money you can raise, while an educated student is redefined as an employable one.

Hm - yes and no: Yes, in as much as the present financial situation of the universities is far worse, on average at least, as it was in the early 1980ies,
when Brian Ford explained that in England quite the same things had happened
with the schools as I had seen happen in Holland. And no, in as much as the
situation already was rather hopeless in the early 1980ies, for already then
the average student who entered university was far less well-prepared as
the average student had been thirty years before.

Anyway - I liked this article more than not, mostly because there also will be few professors who will say things like Eagleton, but I also disagree in at least two ways: First, it goes back far earlier than Eagleton claims - again: See
Brian J. Ford's "The cult of the expert", from 1982, when the damages had been done - and second, it is considerably more serious than Eagleton seems to think: The
universities these days give courses and impose demands most people with
an IQ of 100 (the average IQ) can handle.

Which means that apart from a few subjects - like: mathematics, physics, chemistry, engineering, computing, Chinese - the universities are dead, and have been dead for at least 30 years, for the simple reason that for something like 800 years they were the places were the brightest could get a fine education (if they had the money to do it), while from the 1960ies onwards they have been radically redesigned to give the average an - at best - average education.


[1] In Holland "everyone is of the same value", except sports
talents: There are tens of millions for an 18-year old who can kick a ball really well, but any other claim to being special, such as a very high IQ, is looked down upon by most Dutchmen, and will get no support.

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