Select Committee on European Union Minutes of Evidence

Examination of Witness (Questions 1 - 19)




  1. Good afternoon, Professor Angell. Welcome. We are very pleased indeed that you have been willing to appear before the Committee at such short notice. We are grateful to you also for the written submission which you have put to us. It is rather unusual for us to receive it in book form. In our call for evidence we usually ask for a short submission, preferably on one side. Understandably, as you were not given the opportunity, you have not managed that. I did have a look at your book last night rather late so I did not read it all but I read the preface and naturally I think within the space of two pages of the preface you got pretty well near to doing a summary. I also read the introduction and then in good journalistic style I skipped towards the end and read part of chapter 17.
  (Professor Angell) And then you had nightmares.

  2. I must admit I did not sleep very well last night.

  A. Good. It worked then.

  3. The one thing that I think we can be assured of this afternoon is that you are going to keep all of us awake. I understand you have been asked to speak to us for about five minutes in the first instance.

  A. I thought I would summarise my position. The Times, The Guardian and the Independent all call me "the Angell of Doom", and you are going to find out exactly why in the next five minutes. Before we actually look at the six questions on the table I thought it only right that I explain my position, where I am coming from because it is a rather unusual one. As you say, that is why I gave copies of my book. In The New Barbarian Manifesto I claim that the socio-economic certainties of the Twentieth Century, the century of the masses, is actually collapsing. Because of telecoms and speedy international travel the whole nature of political governance has changed, its relationship with capital, and even capitalism itself is mutating. The fault lines are appearing everywhere and these are going to have awesome effects on politics, business, society as a whole. The very nature of institutions like work, the workplace, money, the marketplace, are all mutating. This will feed back and cause major changes in society. This is not a nice, neat, tidy transition, it is a severe and a total dislocation with the past. Because of computerised production and the exportation of jobs, the structured world of semi-skilled labour that arose in the industrial revolution is now totally disintegrating. Of course labour is needed but there is a world full of labourers out there. Global transaction costs have dropped to a point where there are now a billion new workers on the global job market. So why should the world's unemployed all live in developing countries? The West is going to have to bear its share. The Marxist myth that labour creates wealth is going to be buried once and for all in the information age. It is that rare commodity, human talent, which is the stuff of work in tomorrow's world. Hence, it is a time of great opportunity but only for an elite few. New technology has unleashed unstoppable global economic forces which are empowering what I call the "New Barbarians". IT has liberated them from the constraint and the mind-set and the moralities of the collective. It has set the individual free to roam the higher dimensions of cyberspace. This will have astounding implications for anyone who can grasp its potential. These New Barbarians ignore tribal loyalties, they are what Lasch called The Revolt of the Elites. He was clear that the battle between the individual and the collective has been rejoined. The collective, the masses, may have won the battle of the industrial age but the information age is totally another matter. The New Barbarians will relocate physically, fiscally or electronically to where profit is greatest and regulation least. These barbarians choose to give their loyalty freely and voluntarily. Loyalty is no longer an accident of birth: it is individual, it is not tribal; it is contractual, it is not judicial. It is made consciously on the basis of unashamed rational self-interest. Barbarians know that there are enormous opportunities for those with the vigour and the vitality, the nerve, to break free of tribal boundaries drawn in the past, and who have the vision to redraw their own borders, their own future. These opportunities will sweep away the old moribund institutions, not in anarchy and chaos but with new ideas, new moralities, new power structures, new rituals. They are subsequently laying down the foundations for new institutions. States must learn that they are now just another form of commercial enterprise frantically trying to find employment for their masses. They will have to be run like corporations and survive economically on the efforts of an elite few, because no nation state has an automatic right to exist. Not only will state be pitted against state, but area against area, town against town, suburb against suburb. Such is the genesis of the new society, in which the winners in the knowledge economy, I believe, will reinvent the medieval City State as a "Smart Region", an electronic ville, an e-ville, at the hub of global electronic multimedia and transport networks. An independent cosmopolitan City State of London makes real economic sense. Home rule inside the M25 motorway. Forget about the Mayor of London, if the House of Commons wants to help London they should move to Birmingham. Meanwhile, the losers face a bleak future. Far from creating a Utopia, information technology will spell poverty for the many and self-governing opulence for the few. The few are what Rees-Mogg called sovereign individuals. Only those individuals with knowledge, talent and power to guide this social revolution will prosper, liberated from taxation, while semi-skilled and unskilled labour becomes a commodity and worldwide a billion disenfranchised production workers compete on price against more efficient robots. The Twentieth Century will be remembered not as a battle between the collectives of the left and the collectives of the right, but as the domination of the individual by the tribe, as the control of trade by collective ideologies. The Twentieth Century is over, welcome to the future, welcome to the brave new world of The New Barbarian Manifesto.

  4. Thank you very much indeed, there is plenty of food for thought there for us and I am sure that some of my colleagues will be picking up on that. In the meantime we have to address ourselves to a number of issues that are immediately before us that relate to the European Union. We will come back to some of your points during the course of those. I would like to try to ensure that we do focus on some of those topics which have been sent to you in advance. I would like to start off, if I may, seeking your views on what do you believe are the premises which are behind the draft Action Plan eEurope: An Information Society for All?

  A. In responding to your questions I see my role as not giving you answers, but highlighting what I see as the thinking behind this eEurope document and then asking questions about whether it is appropriate to this new information age. We make sense of our world through rituals and institutions. I am asking can the rituals and institutions born in the age of the machine, which I think go all through this document, make any sense in the information age? The problem I have with this document is that it doesn't pass the "so what?" test. I read it and I said "so what?" For example, take the emphasis on the information society. Across the Atlantic they talk about the information economy and they have a totally different emphasis on what is going on. I am convinced that the American Dream is going to win against what I call the collectivist sentimentality of the information society that pervades such European documents.

  There are matters not mentioned there—where is the discussion on electronic-cash, for example, which is going to be a fundamental issue? Governments hate it because it means they lose control of their economy, but it is going to come. The real issues are not there. It is a form of sentimentality if you actually look through it. It is full of truisms, which are mostly false. "Success in the new economy depends on the consumer's ability to take full advantage of the opportunities." Nonsense. Success depends on the creators of the product. The document has cause and effect totally mixed up.


  5. Can I press you to enumerate some of the issues you believe that should be there but are missing?

  A. Let us look at the issues that are here that should not be. Take, for example, health care on-line. This is basically saying business should subsidise the welfare state. Business is about business, making money, making profits for the shareholders. It is not acting as some cut-price support for the state. Participation for the disabled is another form of support for the state. Why? Why is it here? If it makes sense commercially it will be there anyway. IBM are already producing software that enable the blind to listen to what is on the Internet. It does not need a EU programme. The danger I see in these ten groups, and the first reaction I got when I read this document was, oh no, ten more gravy trains.

  6. Those are the ones. You are taking out health care.

  A. It should only be there if it makes commercial sense.

  7. Are you taking out the recommendations regarding the disabled? Do you think there should be issues there or should we be leaving it totally to free market force.

  A. No, no. There is a real role for Government. I am quite clear that the role for the Government is to produce the right people with the right knowledge and expertise, which are the raw material for the global companies. The state is there to service the companies and to provide them with an efficient infrastructure, a minimally regulated market, a secure, stable and comfortable environment. In a sense there should be some form of Bill of Rights which prevents Government from taking arbitrary action.

Baroness O'Cathain

  8. Thank you, Professor, you have quite taken my breath away. Just on the last point, it is the Government's responsibility to produce the right people with the right knowledge and the right expertise? How? DNA cloning or something?

  A. The problem is the question of how you filter out. We have an ideology in this country that everyone is capable of being educated, I discount that totally. 20 per cent of British people are functionally illiterate. The idea that somehow they cannot read books but they are going to use e-commerce is nonsense.

  9. That is a very interesting point, but it is not part of this investigation. If there is 20 per cent of the population functionally illiterate, it is up to somebody somewhere, probably the Government in conjunction with business. This does have an input here because after all it is in businesses' interests to make people function.

  A. Only if they make a business case for doing it, not as an obligation because they tie into some document. Then you ask, why are they tying in? Then we are back to gravy trains again.

  10. The point is that it is in businesses' interest to have a functionally literate work force because otherwise when a new development comes along if they are not literate they cannot be employed—

  A. I disagree with that.

  Lord Sandberg: So do I.

Baroness O'Cathain

  11. What needs to be done to stimulate e-commerce? First of all, do you think e-commerce needs to be stimulated by the European Union in terms of a directive, in terms of a super national force or do you actually believe it should be up to national government or the third option, which is, that we could argue that e-commerce is stimulating itself, it is self-creating and self-stimulating? Do you think that is where it should be left?

  A. This document does put its finger on the two major issues that will drive e-commerce forward, one is tax and the other is intellectual property rights. These are the key issues that have to be addressed that will actually drive e-commerce forward. The information society, as this document projects, is actually the old society with e-commerce stuck on top. My prediction is that it will be a totally different society. Trying to create this false marriage is actually going to precipitate problems. It will actually make our society less efficient than what is going on in Dubai, in parts of India, in Malaysia, even.

  12. How can a government, or indeed the European Union as a collective of governments, manage to sort it out through tax? You and I know that some e-commerce people do not have to pay tax at all, they will not have to pay tax. All that you have to do is say you are based in the Antarctic and that will do.

  A. That is the basic problem, that people can now avoid taxation. There is that possibility, because we earn money around the world we can leave it elsewhere. The knowledge workers have to be based somewhere and provided there is a contract between that somewhere and the knowledge workers they will be happy to pay tax, but to a certain extent. I am not libertarian, I do not believe that tax should be scrapped. Tax should be used for a limited number of things, basically to protect the individual from the masses, pay for the police, pay for the military, pay for the judiciary and pay for public health. This document is ambiguous about public health. Basically public health, I believe, is about communicable diseases, not cancer, and so on. That is what the state should pay for, nothing else. That is where I stand and I think most knowledge workers think the same way because then they believe they are getting value for money. The only role of politics and politicians is to guard the guardians of society, the police, the military and the judiciary. Someone has to guard the guardians and that is the role of politics.

  13. Coming straight from that, the Government has no locus at all in stimulating or getting involved in e-commerce?

  A. Like all of these things the answer is yes and no. The danger is that many of the projects have hidden agendas. Government is not a unified entity, there are all sorts of turf wars going on. If you look at this country now the obvious way forward in e-commerce is to have some form of trusted third party aspect of e-commerce and yet we are fighting a battle between the spooks on the one hand and the Department of Trade on the other.


  14. Can you explain that? Define the third party?

  A. If I am e-trading with you, I do not know who you are and you do not know who I am. We go to someone who guarantees our legitimacy. Maybe this is a role for government acting in this way, but if government insists on looking at what you are doing then you are not trusted, so nobody trusts government. For example, you have the GSM phone. Basically the cryptography on GSM has been reduced to a point now so the government can hack into it and listen to what is going on, but hackers can get into it also. So the GSM codes are now totally irrelevant as far as encrypted communication is concerned. That is because government has interfered. These are the issues. Having someone trusted, somebody who holds my money. It is like a solicitor basically, but in electronic form.

Baroness O'Cathain

  15. Or Government. Could the Government not have that role?

  A. Do I trust Government? "Trust me, I am from the Government". That has got a slight little frisson to it.


  16. Could business not have that role in certain respects?

  A. That is where I see companies like the Telcos who could take on this role, but the trouble is they have been corrupted as well.

Lord Sandberg

  17. The banks have had that role for years.

  A. In a sense electronic banking could be the way forward with the banks themselves acting as these trusted third parties when A is dealing with B and neither know one another. There are no institutions of trust. When we go to the High Street we have one hundred years of the shop being there, there is an institution of trust, but when we do things electronically across the other side of the world we do not know whether there is a crime going on. Crime is rampant. If you take, for example, Visa. Fifty per cent of Visa fraud is internet-related but only two per cent of the business. That is the reality of e-commerce. There are a lot of criminals out there and therefore it is essential that we have some form of trust institutions built in. This document mentions it in passing in some little paragraph. Yet it is the fundamental issue.


  18. In a sense you are saying there is a requirement for regulation.

  A. Not necessarily government regulation.

  Chairman: You are raising a question mark over who should regulate it.

Baroness O'Cathain

  19. Who should regulate it, exactly?

  A. Why should the market not regulate itself? Why should the company not set itself up to be the regulator?

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