tag:theconversation.com,2011:/us/topics/black-wednesday-27711/articles
Black Wednesday – The Conversation
2022-10-03T14:56:48Z
tag:theconversation.com,2011:article/191696
2022-10-03T14:56:48Z
2022-10-03T14:56:48Z
Mini-budget: lessons from the UK’s long history of economic crises
<p>It was a <a href="https://theconversation.com/mini-budget-2022-experts-react-to-the-new-uk-governments-spending-and-tax-cut-plans-191274">mini-budget</a> with a major impact. Shortly after the UK chancellor announced his plans for a “new era” full of tax cuts, there were dramatic <a href="https://theconversation.com/sterling-hits-all-time-low-two-things-can-turn-this-around-but-neither-is-straightforward-191370">falls in the pound</a>, a nervous response <a href="https://www.bbc.co.uk/news/business-63061534?at_medium=RSS&at_campaign=KARANGA">from mortgage lenders</a> and an <a href="https://www.theguardian.com/business/live/2022/sep/28/sterling-slumps-imf-urges-uk-reconsider-tax-cuts-stinging-attack-business-live">urgent intervention</a> from the Bank of England. </p>
<p>Such high levels of uncertainty, especially during a cost-of-living crisis, have led to widespread criticism of Liz Truss’s new government, and a <a href="https://www.reuters.com/world/uk/uks-opposition-labour-party-surges-33-point-lead-over-conservatives-yougov-poll-2022-09-29/">huge boost</a> in the polls for the Labour Party. Aside from a <a href="https://www.bbc.co.uk/news/live/uk-politics-63114183">U-turn</a> on ditching a tax cut for the highest earners, at the time of writing, Truss appears to be sticking to most of her plan. </p>
<p>But she should take note perhaps of the way her predecessors in No.10 have dealt with economic whirlwinds of the past – for there have been plenty. Some of their effects lasted years and caused major political upheaval. Here’s a reminder of some of them.</p>
<h2>The 1931 devaluation crisis</h2>
<p>In September 1931, the UK was forced to abandon the gold standard - the cornerstone of its economic policy - and devalue the pound. It was a <a href="https://www.nber.org/system/files/chapters/c8688/c8688.pdf">humiliating moment</a>, which came after the British economy and its finances had been severely weakened by the first world war and its aftermath. </p>
<p>From 1925, the Bank of England had kept interest rates high to keep the pound at a fixed parity to gold, but by 1931, with rising unemployment and banks failing throughout Europe, this was not enough. </p>
<p>As gold reserves drained from the Bank, it was forced to approach American bankers for a loan to stabilise the currency. Those bankers demanded drastic public spending cuts as part of the deal, including a 20% cut in unemployment benefits.</p>
<p>The Labour prime minister, Ramsey MacDonald, believed he had no choice but to agree, despite opposition from members of his cabinet and the trade unions. In August 1931, MacDonald resigned and <a href="https://www.nationalarchives.gov.uk/cabinetpapers/alevelstudies/national-government-1931.htm">formed a cross-party national government</a>, made up mainly of Conservatives. </p>
<figure class="align-center ">
<img alt="Ramsey MacDonald" src="https://images.theconversation.com/files/487574/original/file-20220930-16-6fhf78.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/487574/original/file-20220930-16-6fhf78.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=440&fit=crop&dpr=1 600w, https://images.theconversation.com/files/487574/original/file-20220930-16-6fhf78.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=440&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/487574/original/file-20220930-16-6fhf78.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=440&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/487574/original/file-20220930-16-6fhf78.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=552&fit=crop&dpr=1 754w, https://images.theconversation.com/files/487574/original/file-20220930-16-6fhf78.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=552&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/487574/original/file-20220930-16-6fhf78.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=552&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Old MacDonald had a plan.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Erich_Salomon_Ramsay_MacDonald.jpg">Wikimedia Commons</a></span>
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<p>Despite this, the pressure on the pound proved too great, and in September the gold standard had to be abandoned. Nevertheless, in the following month the national government won a landslide victory, attacking the Labour Party for its economic mismanagement. Labour did not return to power until 1945. </p>
<h2>The 1976 IMF crisis</h2>
<p>In September 1976, the UK’s economy was in such a poor state that the Labour government was <a href="https://www.nationalarchives.gov.uk/cabinetpapers/themes/imf-crisis.htm">forced to go cap-in-hand</a> to the International Monetary Fund (IMF) to ask for a record US$3.9 billion loan. It was a pivotal moment which seemed to symbolise Britain’s post-war economic decline. </p>
<p>The UK economy was already <a href="https://www.omfif.org/2016/09/when-britain-went-bust/">facing multiple problems</a>, with a growing balance-of-payments deficit, inflation at over 15%, an unsustainable government deficit, and rising unemployment. In return for its support, the IMF insisted on major cuts to public spending. </p>
<p>The Labour government, led by Jim Callaghan, was split over whether to accept these terms, but eventually gave in, cutting back large swathes of government investment, including its council house building programme. Worse was to come. The squeeze on public spending, coupled with high inflation, led to the government trying to limit pay increases, especially in the public sector. </p>
<p>The 1976 crisis and the subsequent strike wave in the 1978-1979 “winter of discontent” severely damaged Labour’s economic credibility, opening the way for the election of a Conservative government under Margaret Thatcher. </p>
<h2>The 1992 ERM crisis</h2>
<p>On 16 September 1992, <a href="https://theconversation.com/why-black-wednesday-still-matters-it-was-the-start-of-markets-telling-politicians-what-to-do-190471">Black Wednesday</a>, the pound came under intense pressure on foreign exchange markets. Without the support of European central banks, Britain was <a href="https://www.omfif.org/press-title/six-days-in-september/">forced out</a> of the European Exchange Rate Mechanism (ERM) – the centrepiece of government’s plan to curb inflation – despite desperate measures from the Bank of England which raised interest rate in a single day from 10% to 15%. </p>
<p>That evening, the Conservative chancellor, Norman Lamont, announced that Britain was “temporarily” suspending its membership of the ERM after a “difficult and turbulent day”. The Conservative government, led by John Major, never fully recovered its reputation for economic credibility, while bitter divisions emerged over the future of UK’s economic relations with the rest of Europe. </p>
<p>Five years later, with the economy still weakened, and the government cutting spending and raising taxes, the Labour Party under Tony Blair won a landslide victory in 1997.</p>
<h2>The 2008 global financial crisis</h2>
<p>In September 2008, the <a href="https://journals.sagepub.com/doi/10.1177/1464884912460171">global financial system</a> suddenly ground to a halt as fear spread throughout the financial system that major banks were insolvent. The immediate cause was the collapse of a major US investment bank, Lehman Brothers, which held too many risky financial assets with plummeting values.</p>
<p>It soon became clear that many other banks, both in the US and the UK, also held too many of these assets. As contagion spread, governments scrambled to save the entire banking system – and the world economy – from collapse. </p>
<p>By October, with major British banks running out of cash, the Labour government nationalised the Royal Bank of Scotland and Lloyds, while the Bank of England provided large, undisclosed cash loans to prop them up. In total, the <a href="http://news.bbc.co.uk/1/hi/business/8248434.stm">potential liability</a> to the UK government amounted to £1.5 trillion. </p>
<p>The swift action prevented a global banking collapse, which would have crippled the world economy. But it still led to a severe and long global recession, while the cost of the bailouts led government debt to soar. The hard-won economic credibility of the Labour government under Gordon Brown was shattered, and a Conservative-Liberal Democrat coalition government was formed in 2010 in the midst of new market jitters over a looming crisis in the Eurozone.</p>
<p>Although these crises had different origins, a number of common themes emerge. </p>
<p>Firstly, the evidence suggests it is difficult for governments to buck the financial markets when traders have lost confidence in their economic policy. Credibility in financial markets is fragile. It takes a long time to establish, can be swiftly lost, and hard to recapture. The danger for governments is that problems in one financial market can often spillover into others <a href="https://discovery.ucl.ac.uk/id/eprint/16558/">through contagion</a>, sometimes with unexpected and global consequences.</p>
<p>Secondly, studies have shown that <a href="https://www.imf.org/en/Publications/FM/Issues/2020/09/30/october-2020-fiscal-monitor">cuts to public spending</a> – often one of the most common responses to a crisis – can be damaging. Reductions in spending, especially on infrastructure, can make it harder to repair the economic damage and stimulate growth. </p>
<p>Finally, there is evidence that the damage to a <a href="https://new.cepr.org/voxeu/columns/political-aftermath-financial-crises-going-extremes">government’s economic credibility</a> has long-lasting effects on political confidence, permanently changing voting intentions, weakening support for established parties who have been in power. It can lead not only to electoral defeat, but disenchantment with the whole political process.</p><img src="https://counter.theconversation.com/content/191696/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Steve Schifferes does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Crisis, which crisis?
Steve Schifferes, Honorary Research Fellow, City Political Economy Research Centre, City, University of London
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/190471
2022-09-15T11:31:44Z
2022-09-15T11:31:44Z
Why Black Wednesday still matters – it was the start of markets telling politicians what to do
<p>I spent Black Wednesday – the day the markets successfully bet against the power of the British government to prop up the pound sterling – on the 28th floor of Dresdner Bank’s headquarters in Frankfurt. I had just been hired as an exchange-student intern in the back office for currency options and interest rate derivatives. Though all days on the trading floor were busy, I had never seen anything like it before. </p>
<p>From one end of the room to the other, men in suits (there were few women) were shouting down phone lines, shouting at each other, or doing both at the same time. There were piles of feather-light trade tickets with numbers scribbled on them: 10, 50 or 100 million Deutschmarks, dollars, francs or pounds.</p>
<p>The excitement was over the exchange rate mechanism (ERM), the framework set up by the European Economic Community in 1979 to keep its members’ currencies in a “trading band” of similar values. If a currency threatened to breach its band, central banks had to intervene. This forerunner to the euro was designed to avoid sharp currency fluctuations and high inflation, and for years did rather well. </p>
<p>Eight countries initially joined: France, West Germany, Belgium, Luxembourg, Ireland, Denmark, Italy and the Netherlands. As a traditionally strong currency in a country of low and stable inflation, the West German deutschmark (DM) acted as the de facto anchor.</p>
<p>France even coined a new phrase for the effect of the ERM on its national currency. “<em><a href="https://www.nytimes.com/1992/12/21/business/the-franc-fort-comes-under-siege.html">Franc fort</a></em>” or “strong franc” was not only a homage to the strong anchor but also a cheeky reference to Germany’s financial heartland. </p>
<h2>Enter the British</h2>
<p>The British <a href="https://www.prospectmagazine.co.uk/magazine/ermthetruestories">famously stayed out</a> of the ERM during the 1980s because Margaret Thatcher didn’t want monetary policy subordinated to Brussels. When she finally agreed to join in October 1990 in the dying days of her premiership, she locked in the pound at £1.00 = DM2.95 plus or minus 6%, meaning it could fluctuate between DM2.77 and DM3.13. </p>
<p>The nation had just entered a recession, however. With high inflation, high interest rates, high government budget deficits, a collapsing housing market and low competitiveness, traders became increasingly doubtful about the Bank of England’s ability to defend the DM2.77 floor. </p>
<p>To rub salt in the wounds, West German premier Helmut Kohl had generously offered a 1:1 conversion rate for East Germans converting East German marks to Deutschmarks following the German reunification in 1990. This spurred inflation in Germany, and the Bundesbank responded by raising interest rates. </p>
<p>The Deutschmark grew stronger as a result, making it harder for the pound and other currencies to stay in their bands. Nonetheless, Thatcher’s successor, John Major, committed to defending the pound at all costs. These were still the days when decisions on interest rates were <a href="https://www.ft.com/content/388fae86-3184-11e7-9555-23ef563ecf9a">ultimately taken</a> by the government and not the Bank of England. </p>
<p>After weeks of mounting pressure, on the morning of September 16 1992, the Bank of England was <a href="https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp">forced to</a> unexpectedly raise interest rates from 10% to 12%. Rates had been at these levels in 1988-91 to counteract a boom, but a raise was the last thing the economy needed during a recession. </p>
<p>Currency traders were unconvinced that raising rates would work and redoubled their bets that the band would not hold. And even when the Bank desperately announced that afternoon that it would raise interest rates to 15%, it did not revive the pound. At 7pm the game was up: Chancellor Norman Lamont announced Britain would leave the ERM. </p>
<p>The pound now returned to “floating”. Or more precisely, it sank like a stone, falling from above US$2 to below US$1.50 in the coming weeks. The whole event dealt a huge credibility blow to the ruling Conservatives. George Soros, a leading currency trader, <a href="https://www.investopedia.com/terms/g/soros.asp#:%7E:text=George%20Soros%20is%20most%20famous,a%20number%20of%20European%20countries.">reportedly made £1 billion</a> betting against sterling. </p>
<h2>Central bank independence</h2>
<p>Black Wednesday can be placed alongside other watersheds in contemporary British-European political history such as opting out of the euro, not signing up to the Schengen area of free movement of people, and, of course, Brexit.</p>
<p>Yet from an economic perspective, its ramifications are arguably unique. The crisis, which <a href="https://www.tcd.ie/Economics/assets/pdf/SER/1996/Moniel_Wolters.html#:%7E:text=Tension%20within%20the%20ERM%20began,still%20the%20lira%20weakened%20repeatedly.">also saw</a> the Italian, Swedish and Finnish currencies coming under pressure, led to a consensus that central banks should become independent from their governments and focus on inflation and essentially nothing else. </p>
<p>The Bank of England officially became responsible for targeting inflation in October 1992, before being granted independence in 1997 under Tony Blair’s administration. The European Central Bank (ECB), modelled mainly on the Bundesbank, focused just on targeting inflation from its inception in 1999, and many others have followed suit. </p>
<p>But the true legacy of Black Wednesday is that it was the day the state fought the markets, and the markets won. Financial markets grasped power, and few have dared to challenge them since. </p>
<h2>The new rulers</h2>
<p>There are, of course, other events that symbolise the rise of market-oriented thinking: Thatcher’s <a href="https://www.goldmansachs.com/our-firm/history/moments/1986-big-bang.html">“big bang” deregulation</a> of the City of London in 1986, the fall of the Berlin Wall in 1989 and arguably even Blair’s election win in 1997. But the timing of Black Wednesday was perfect. The ideological and institutional foundations for free markets had been laid. </p>
<p>Capital had been allowed to flow across borders. Financial innovation had ensured the markets had grown just large enough to be reckoned with. Once they struck the heart of the establishment that September in 1992, it killed off any idea that they could be tamed by democratic means.</p>
<p>They went on to grow ever larger and more powerful, evolving into machines that provide immediate unsentimental verdicts on the history politicians and policymakers are trying to write. It has become hopeless to fight back because the markets are deemed “right”. </p>
<p>Politicians instead compete to please these new rulers. Look no further than former Chancellor <a href="https://www.ft.com/content/dd35044a-c568-41bc-bcdf-adf659c485d6">Rishi Sunak warning</a> that Liz Truss’s campaign promises would see the markets losing faith in the UK economy. He may not have persuaded voters, but Truss will undoubtedly change tack if there are signs that investors are losing faith in her policies. </p>
<p>It has become, to paraphrase the <a href="https://pechorinsjournal.wordpress.com/2014/08/13/capitalist-realism-by-mark-fisher/">late philosopher Mark Fisher</a>, easier to imagine an end to the world than an end of the rule of the markets. If I had to pick one day in history to symbolise the supremacy of markets over states and democracies, Black Wednesday would be the one.</p><img src="https://counter.theconversation.com/content/190471/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alexis Stenfors does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
On September 16 1992 the state fought the markets, and the markets won.
Alexis Stenfors, Reader in Economics and Finance, University of Portsmouth
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/169991
2021-10-18T14:16:29Z
2021-10-18T14:16:29Z
How South African editor Aggrey Klaaste put himself on the line with his contrarian idea
<figure><img src="https://images.theconversation.com/files/426982/original/file-20211018-15-u4rmbf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Aggrey Klaaste, right, used the Sowetan newspaper to drive his Nation-building campaign. He is seen here with John Mabatho, the newspaper's production manager.
</span> <span class="attribution"><span class="source">Paul Velasco © Arena Holdings</span></span></figcaption></figure><p>In 1988, Aggrey Klaaste <a href="https://www.omt.org.za/history/some-omt-beneficiaries/aggrey-klaaste/">became the editor of Sowetan</a> and launched a project to intervene in the fraught political situation in South Africa. The Sowetan was the foremost daily newspaper for black South Africans, a successor to the Post and <a href="https://www.sahistory.org.za/dated-event/black-wednesday-banning-19-black-consciousness-movement-organisations">The World</a>, both banned by the apartheid state. </p>
<p>It was a tumultuous time in South Africa, with state persecution and efforts to quell protest and opposition reaching their zenith. Amid ongoing protest against the apartheid state, the government had declared <a href="https://www.saha.org.za/ecc25/ecc_under_a_state_of_emergency.htm">two states of emergency</a>. In addition, political groups within the country were at war with one another. </p>
<p>Klaaste was distressed by what he saw happening in black communities, where residents faced state terror and political violence. As a result, he sought to rebuild local community organisations and to restore values such as good citizenship, self-help and neighbourly conduct. On taking up the editor’s mantle, he began outlining his “big idea” – <a href="https://www.joburg.org.za/play_/Pages/Play%20in%20Joburg/Joburg%20Vibe/links/people%20of%20the%20city/Links/Aggrey-Klaaste---still-building-the-nation.aspx">nation-building</a>. Its central idea was to unite black South Africans behind community improvement and engagement. He intended the newspaper to be a key driver of the project.</p>
<p>What Klaaste was doing was providing a forum for citizenship at a time when black South Africans were marginalised. </p>
<p>Klaaste immediately ran into strong headwinds – inside the newsroom and outside it.</p>
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Read more:
<a href="https://theconversation.com/public-trust-in-the-media-is-at-a-new-low-a-radical-rethink-of-journalism-is-needed-155257">Public trust in the media is at a new low: a radical rethink of journalism is needed</a>
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<p>Most of the journalists who worked for him supported the <a href="https://oxfordre.com/africanhistory/view/10.1093/acrefore/9780190277734.001.0001/acrefore-9780190277734-e-83">Black Consciousness Movement</a>. The movement brought together the country’s oppressed people to collectively fight against racial oppression. They strenuously opposed nation-building, as they saw it as collaborating with the apartheid system.</p>
<p>One of the arguments encountered was that it wasn’t the time to talk about nation-building. Apartheid needed to be torn down first. A former Sowetan journalist remembers:</p>
<blockquote>
<p>We actually confronted and fought Klaaste … saying, you know, ‘liberation now’ and good stuff later. But he said, ‘No, no, no – it’s got to go in parallel.’</p>
</blockquote>
<p>Outside the newsroom, the union coalitions and mass anti-apartheid movements were advocating civil disobedience to bring the country to its knees, a far cry from Klaaste’s nation-building.</p>
<p>Klaaste persisted. He began to explore nation-building in his weekly column, “On the Line”. But the concept of nation-building presented a challenge. It was a vague ideal that needed to be fleshed out. So, at first, he floated the concept without too many details.</p>
<blockquote>
<p>I am preparing the ground, laying the bed so to speak for the seed of an idea I hope to be planting in the not too long future. Frankly, the idea excites and exhilarates me as it appears to have breath-taking possibilities.</p>
</blockquote>
<h2>The birth of an idea</h2>
<p>Klaaste suggested that black South Africans were in a weak position, despite being in the majority, and that the weakness stemmed from a lack of unity, the lack of a “central idea” to motivate all the various movements. </p>
<p>Nation-building could be that idea.</p>
<p>His column inaugurated a conversation with his readers about nation-building. He also circulated them before publication to Sowetan journalists for critique. The idea began to evolve through these processes. His column became the philosophical heart of the nation-building campaign that Sowetan was establishing, the space where the idea was debated and developed.</p>
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Read more:
<a href="https://theconversation.com/new-threats-to-media-freedom-come-from-unexpected-directions-148265">New threats to media freedom come from unexpected directions</a>
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</em>
</p>
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<p>At first, Klaaste maintained an uncertain and questioning position, reporting on reactions to the idea. He shared the positive responses and the negative. He tended to answer criticism by stressing the need to rebuild community, to work for a future.</p>
<p>However, soon he and his colleague <a href="https://www.orlandosentinel.com/news/os-xpm-1990-07-09-9007070127-story.html">Sam Mabe</a> began engaging vigorously with opposing views. Klaaste was always respectful and constructive in his engagements. He felt strongly that people with differing political positions should talk to each other. He demonstrated such bridge-building through his writing.</p>
<p>One column explicitly modelled the “for and against” of his idea. In early 1989, he put his nation-building approach side by side with its main opposition, the “liberation first” position, writing the column as a discussion between two friends. His interlocutor is unnamed, but could have been any one of a number of Sowetan senior colleagues or anti-apartheid activists. He is described by Klaaste as “a dear friend of mine”, “who has in various courageous, responsible ways, showed me what it means to be committed to the struggle”.</p>
<p>Klaaste “hears” the friend’s argument in the column, honouring both the speaker and his position:</p>
<blockquote>
<p>He has convinced me in his quite persuasive way that if the decision for the total revolution is taken in his unselfish totally responsible way, you must be a fool not to agree with him … He has taught me that perhaps we are almost fated to pay the heaviest of prices for our mistakes…</p>
</blockquote>
<p>In response, Klaaste convinces his friend to let him give nation-building a shot.</p>
<p>The column described not so much an argument, but an ongoing process of dialogue, in which everyone’s point of view was heard.</p>
<p>Klaaste and Mabe also began fleshing out nation-building in relation to other philosophies. Early on, <em>ubuntu</em> (humanness) is introduced as a foundational concept. The southern African word is often used to encapsulate sub-Saharan moral ideals, expressed in the maxim</p>
<blockquote>
<p><a href="https://theconversation.com/what-archbishop-tutus-ubuntu-credo-teaches-the-world-about-justice-and-harmony-84730">a person is a person through other people</a>.</p>
</blockquote>
<p>Klaaste argued that nation-building was black South Africans taking moral leadership in creating a future for the entire country, based on the practice of <em>ubuntu</em>, which he connected to a range of black political leaders. Among them were <a href="https://theconversation.com/sobukwes-pan-africanist-dream-an-elusive-idea-that-refuses-to-die-52601">Robert Sobukwe</a>, founder of the Pan Africanist Congress, and Nelson Mandela.</p>
<p>Klaaste didn’t nail nation-building to any political flag, but as “the nation’s forum to sort out divisiveness”. He used the example of a family, in which each member has different political affiliations: </p>
<blockquote>
<p>I belong to an extended family … we have leanings towards a whole range of diverse and ideological planks. We never fight over this … Nation Building is about the formation of such filial links.</p>
</blockquote>
<p>Nation-building thus provided a broad church for the variety of politics in black communities. The campaign also explicitly drew on one aspect of Black Consciousness, active self-reliance, to argue that black communities must take charge of their own empowerment.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/journalism-makes-blunders-but-still-feeds-democracy-an-insiders-view-146364">Journalism makes blunders but still feeds democracy: an insider's view</a>
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<p>By 1989, a year into nation-building, the campaign was firmly established at the newspaper. In 1989, too, the apartheid government began talks with the ANC. These were to culminate in a democratic dispensation for South Africa.</p>
<p>This made nation-building highly relevant to the new era of creating inclusive citizenship.</p>
<p><em>This article is an edited extract from a chapter in the <a href="https://witspress.co.za/catalogue/public-intellectuals-in-south-africa/">book</a> Public Intellectuals in South Africa: Critical Voices from the Past, edited by Chris Broodryk and published by <a href="https://witspress.co.za/">Wits University Press</a></em></p><img src="https://counter.theconversation.com/content/169991/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lesley Cowling does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Klaaste was distressed by what was happening in black communities, where residents faced state terror and political violence. He sought to restore values such as self-help and neighbourly conduct.
Lesley Cowling, Associate Professor in the Department of Journalism, University of the Witwatersrand
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/148265
2020-10-16T13:34:56Z
2020-10-16T13:34:56Z
New threats to media freedom come from unexpected directions
<figure><img src="https://images.theconversation.com/files/363914/original/file-20201016-19-jqz8wf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Percy Qoboza, editor of The World, second from left, being arrested by apartheid police following the banning of the newspaper in 1977.</span> <span class="attribution"><span class="source">Arena Holdings Archives </span></span></figcaption></figure><p>Media Freedom Day in South Africa marks the anniversary of a brutal crackdown by the apartheid state on the media and the <a href="https://theconversation.com/black-consciousness-in-south-africa-demands-a-much-wider-historical-lens-125238">Black Consciousness Movement</a>.</p>
<p>The 1977 killing of Black Consciousness icon <a href="https://www.apartheidmuseum.org/exhibitions/biko-the-quest-for-a-true-humanity">Steve Biko</a> in police custody drew widespread rage and the state responded by closing newspapers, banning organisations and detaining journalists and activists. That was on October 19 of that year, which became known as <a href="https://www.sahistory.org.za/dated-event/black-wednesday-banning-19-black-consciousness-movement-organisations">Black Wednesday</a>.</p>
<p>Since then, South African journalists have used Black Wednesday to draw attention to the importance of media freedom. As the country and the world changed around them, they have highlighted the enduring importance of that most basic of rights: the citizen’s right to information.</p>
<p>Over the years, the nature of the threats to media freedom has changed. The possibility of naked state repression has receded, at least in South Africa. The recent <a href="https://rsf.org/en/news/zimbabwe-well-known-journalist-arrested-his-harare-home">arrest of Hopewell Chin’ono</a> in Zimbabwe is a stark reminder that journalists in other countries are not as fortunate.</p>
<p>But other threats have emerged, some from unexpected directions.</p>
<h2>Coronavirus and journalism</h2>
<p>This year, the implications of the COVID-19 pandemic are top of mind, and the media have been among the sectors profoundly affected. A <a href="https://www.icfj.org/news/new-global-survey-raises-red-flags-journalism-covid-19-era">new global study by the International Center for Journalists</a> shows the extent of the damage: media organisations have suffered extensive revenue losses, and journalists have felt the physical and emotional strain of reporting a health crisis that endangers them too.</p>
<p>South Africa has seen all of these impacts, which affect journalists’ ability to do their work and thereby harm media freedom. The new <a href="https://journalism.co.za/resources/state-of-the-newsroom/"><em>State of the Newsroom</em> report</a> by Wits Journalism, about to be released, will chart the closures, job losses and other devastation suffered in the media.</p>
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Read more:
<a href="https://theconversation.com/journalism-makes-blunders-but-still-feeds-democracy-an-insiders-view-146364">Journalism makes blunders but still feeds democracy: an insider's view</a>
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<p>In many ways the COVID-19 crisis has merely exacerbated trends that have long been visible. The traditional media business model was in terminal decline long before the first case of COVID-19 was diagnosed in Wuhan, China <a href="https://www.livescience.com/first-case-coronavirus-found.html">in November 2019</a>. As audiences find it easier to get information online, advertising money has moved from newspapers and other legacy media to the giant platforms like Facebook and Google. Studies like the 2018 Rhodes University report <a href="https://drive.google.com/file/d/1c8PfDb2VYjPiPNLvFciYXCx8F2NPcnpC/view?ts=5af04336"><em>Paying the Piper</em></a> have shown how media sustainability affects the quality of journalism.</p>
<p>On the positive side, the International Center for Journalists report has found increased levels of trust in journalism since the start of the crisis. Similar findings emerge in the Reuters Institute’s <a href="http://www.digitalnewsreport.org/"><em>Digital News Report</em></a>. It found that people around the world have relatively high levels of trusts in media coverage of COVID-19 – more than twice as high as for social networks, video platforms or messaging services.</p>
<p>This is welcome news, as these have become the purveyors of misinformation and disinformation – often called fake news. Difficulties in differentiating between reliable and unreliable information online has certainly contributed significantly to the general decline in public trust in journalism.</p>
<p>This is perhaps the most profound threat to media freedom that journalism faces. The relationship of trust between the news media and their audiences is central to the very idea of journalism: there really is little value to reporting that is disbelieved.</p>
<p>Unfortunately, journalists have scored too many own goals.</p>
<h2>Journalism own goals</h2>
<p>Veteran journalist Anton Harber’s new book, <a href="https://www.graffitiboeke.co.za/en/a/Search/0/date_publish%20DESC/Anton%20Harber"><em>So, For the Record: Behind the Headlines in an Era of State Capture</em>,</a> unpacks in great detail how a combination of factors led the <a href="https://www.timeslive.co.za/sunday-times/">Sunday Times</a>, the country’s largest newspaper, to publish a series of stories that he describes as </p>
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<p><a href="https://theconversation.com/journalism-makes-blunders-but-still-feeds-democracy-an-insiders-view-146364">journalistic fiascos</a>. </p>
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<p>These included extensive reporting that the South African Revenue Service was running a “rogue unit”, which the paper <a href="https://www.timeslive.co.za/sunday-times/news/2018-10-13-we-got-it-wrong-and-for-that-we-apologise/">later retracted</a>. The factors included manipulation by elements of the state security apparatus, a newsroom denuded of skills because of business pressures and an arrogant newsroom culture that refused to admit mistakes.</p>
<p>Harber also describes the fascinating backstory behind the <a href="https://amabhungane.org/stories/special-report-the-guptaleaks-and-more-all-our-stories-on-state-capture-2/">Guptaleaks</a>, in which a trove of emails provided unanswerable evidence of <a href="https://mg.co.za/article/2018-09-14-00-definition-of-state-capture/">state capture</a> under the administration of former president Jacob Zuma. This was undoubtedly a high point of South African journalism.</p>
<p>More recently, there have been other missteps that damage audience trust. The brief flurry of speculation about the possible arrest of African National Congress secretary general Ace Magashule on corruption charges was seen as <a href="https://www.dailymaverick.co.za/article/2020-10-07-if-ace-magashules-arrest-story-was-to-test-the-waters-they-look-chilly-for-him/">a manoeuvre by Magashule himself</a> to test the waters and mobilise political support. It seems that governing party factionalists and politicians are still able to find journalists willing to peddle misinformation for political gains.</p>
<p>And there have been other examples, like instances of victims being identified in politically tinged cases of sexual abuse despite clear rules protecting them.</p>
<h2>A more complex world</h2>
<p>The world has become infinitely more complex for journalists since the 1977 crackdown. They face a collapsing business model that is steadily destroying the capacity of news organisations to do thorough work and a torrent of weaponised misinformation, working together to undermine public trust.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/sexism-is-rife-in-the-nigerian-kenyan-and-south-african-press-and-its-left-unchecked-143358">Sexism is rife in the Nigerian, Kenyan and South African press. And it's left unchecked</a>
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<p>These are the new threats to journalism and to media freedom. In response, practitioners need to focus on their relationship with audiences. In his book <a href="https://blogs.lse.ac.uk/polis/2008/04/27/can-you-trust-the-media-by-adrian-monck-book-review/"><em>Can You Trust the Media?</em></a>, journalism professor <a href="https://www.lse.ac.uk/media-and-communications/people/academic-staff/charlie-beckett">Charlie Beckett</a> writes:</p>
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<p>Trust is a relationship, not a fact.</p>
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<p>More than anything, journalists need to hold firmly to the ethical standards that tell audiences their work is reliable and credible. This is what will ensure trustworthy journalism stands out from the noise around it.</p><img src="https://counter.theconversation.com/content/148265/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Franz Krüger does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Journalists need to hold firmly to the ethical standards that assure audiences their work is reliable and credible.
Franz Krüger, Adjunct Professor of Journalism and Director of the Wits Radio Academy, University of the Witwatersrand
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/125238
2019-10-18T12:44:47Z
2019-10-18T12:44:47Z
Black Consciousness in South Africa demands a much wider historical lens
<figure><img src="https://images.theconversation.com/files/297669/original/file-20191018-56224-194znt3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Steve Biko is widely considered to be the father of Black Consciousness in South Africa. </span> <span class="attribution"><span class="source">EFE-EPA/Sowetan</span></span></figcaption></figure><p>This year marks the 44th anniversary of <a href="http://www.apartheidmuseum.org/sites/default/files/files/BIKO%203b.pdf">Black Wednesday</a>, when the apartheid regime banned 18 civic organisations in a targeted attack on media freedom and civil society. Many of these organisations were aligned to the <a href="http://azapo.org.za/about-azapo/black-consciousness/">Black Consciousness Movement</a>. The high number of organisations outlawed by the nationalist government speaks to the breadth of impact Black Consciousness had on South Africa. </p>
<p>South Africans often think with simplistic historical narratives. For example, the historical role of Black Consciousness (or BC) is primarily seen in its renewed challenge to the apartheid state in inspiring the <a href="https://www.sahistory.org.za/article/june-16-soweto-youth-uprising">Soweto Uprising of 16 June 1976</a>. A fuller appreciation of its history and impact transcends this narrower focus.</p>
<p>The craft of historians has been summed up in the so-called <a href="https://www.historians.org/publications-and-directories/perspectives-on-history/january-2007/what-does-it-mean-to-think-historically">five Cs of historical thinking</a>: context, complexity, contingency, causality and change over time. Historians apply these principles to study the past as accurately as possible. This is also known as the principle of <a href="https://www.newworldencyclopedia.org/entry/Historicism">historicism</a>. </p>
<p>Using these principles I have studied South African civil society in the late 1960s and 1970s. While this time was seen as a lull in the opposition to apartheid, closer examination emphasises the importance of ideas, debates and movements in the period.</p>
<p>My <a href="http://ukznpress.bookslive.co.za/blog/2018/05/03/black-consciousness-and-progressive-movements-under-apartheid-presents-an-intellectual-history-of-black-consciousness-in-sa-in-the-comparative-perspective-that-biko-originally-called-for/">book</a>, “Black Consciousness and Progressive Movements under Apartheid”, shows how activists drew on global movements of social change in their responses to the oppression of apartheid which they debated, often heatedly. To understand Black Consciousness historically, and its wider impacts, we need to understand this broader context. Black Consciousness changed blacks and whites. </p>
<h2>Origins of Black Consciousness</h2>
<p>Firstly, Black Consciousness emerged together with a growing global Christian challenge to apartheid. The World Council of Churches set an early benchmark at the <a href="http://psimg.jstor.org/fsi/img/pdf/t0/10.5555/al.sff.document.ydlwcc2079_final.pdf">Cottesloe Consultation</a> (7-14 December 1960) in response to the Sharpeville Massacre of 21 March 1960. At the Consultation the South African churches, including Afrikaans churches, effectively rejected apartheid. </p>
<p>The final statement <a href="http://psimg.jstor.org/fsi/img/pdf/t0/10.5555/al.sff.document.ydlwcc2079_final.pdf">read</a>: </p>
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<p>all racial groups who permanently inhabit our country … have an equal right to make their contribution towards the enrichment of the life of their country.</p>
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<p>The <a href="https://www.oikoumene.org/en/about-us">World Council of Churches</a> became even further radicalised. By 1970 it authorised the first of a series of <a href="http://www.scielo.org.za/scielo.php?script=sci_abstract&pid=S0018-229X2017000200005&lng=en&nrm=iso">financial grants</a> to the banned African National Congress and other liberation movements. The influence of this Christian challenge to apartheid would be felt in many ways, not least in their financial support.</p>
<p>Secondly, my book helps to place Black Consciousness in the wave of protests that spread throughout the world in 1968. <a href="https://uct1968sitin.wordpress.com/">The sit-in</a> by white students that took place at the University of Cape Town is normally given pride of place. But the protest by black students at the University of Fort Hare in 1968 led to a wider mobilisation across South African universities.</p>
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<p>During their sit-in Fort Hare students sang the anthems <a href="https://journals.openedition.org/etudesafricaines/4631?lang=en">“Nkosi Sikelel’ iAfrika”</a> and <a href="https://www.npr.org/2013/08/28/216482943/the-inspiring-force-of-we-shall-overcome">“We Shall Overcome”</a>. Their choice showed how their desire for national liberation and the influence of the Global Sixties merged. I also show how the radicals within the mainly white National Union of South African Students (Nusas) were quick to recognise the legitimacy of the challenge of Black Consciousness and pushed for a change in Nusas accordingly.</p>
<p>Thirdly, I locate Black Consciousness in the rebirth of the labour movement. <a href="https://www.sahistory.org.za/article/south-african-student-organisation-saso">The South African Students’ Organisation</a> had their headquarters in Durban in the early 1970s. This placed Black Consciousness activists in close proximity to people like the philosopher <a href="https://www.sahistory.org.za/people/richard-albert-turner">Richard Turner</a> at the University of Natal and his circle of New Left activists. </p>
<p>My <a href="http://ukznpress.bookslive.co.za/blog/2018/05/03/black-consciousness-and-progressive-movements-under-apartheid-presents-an-intellectual-history-of-black-consciousness-in-sa-in-the-comparative-perspective-that-biko-originally-called-for/">book</a> points to the limits of the binary that Biko and Turner have often been cast in. </p>
<p>I argue for their common understanding of economic exploitation as the basis of apartheid. They agreed on the need for drastic structural change to address South African society’s social ills but they disagreed on how to achieve this. Pointing to Biko’s thinking on the economic rationale of apartheid unsettles the pigeonhole that he is often placed in as a theoretician of race.</p>
<p>Fourthly, my book acknowledges the tension between Black Consciousness and feminism. I show how female activists within the Black Consciousness Movement appropriated the liberation that their male comrades laid claim to. They also distanced themselves from the white feminist movement.</p>
<p>Lastly, my book evokes the metaphor of “shock waves”. I use the term to describe the impact of Black Consciousness on organisations like Nusas as well as the <a href="https://www.tandfonline.com/doi/abs/10.1080/03064228308533602?journalCode=rioc20">Christian Institute</a>. The Christian Institute was an ecumenical organisation that had been established by <a href="https://www.sahistory.org.za/people/reverend-beyers-naude">Reverend Beyers Naudé</a> and a small group of Dutch Reformed clergy in August 1963.</p>
<p>Naudé’s contacts with Biko and the Black Consciousness activists in 1971, together with the conclusions they drew from the <a href="https://www.aluka.org/struggles/collection/SPROCAS">Study Project on Christianity in Apartheid Society</a> (Sprocas), helped change the orientation of the organisation. The first sign of this change was when the second stage of Sprocas, began funding the <a href="https://disa.ukzn.ac.za/sites/default/files/pdf_files/Br1973.0376.4354.000.000.1974.18.pdf">Black Community Programmes</a>, an independent, black-run community development organisation.</p>
<p>It also established a White Consciousness Programme that acknowledged and tried to address the problem of white racism in white society. These were organisational expressions of the success of the arguments of Black consciousness. </p>
<h2>Recovering histories</h2>
<p>It is vital to study the past as “an inventory of alternatives” as the British historian, John Tosh, <a href="https://www.academia.edu/22557305/John_Tosh_-_The_Pursuit_of_History">has encouraged</a>. Although the optimism of the post-apartheid <a href="http://uir.unisa.ac.za/bitstream/handle/10500/3761/thesis_tshawane_n.pdf">rainbow nation</a> has long since evaporated, South Africa has important and often forgotten histories that must be recovered. The frustrations that are manipulated by populists in the country, and across the world, need to be channelled correctly. South Africans need to remember the organisational and ideological efforts of their country’s noblest daughters and sons and strive to follow in their footsteps.</p><img src="https://counter.theconversation.com/content/125238/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ian Macqueen received funding from the National Research Foundation and the University of Pretoria. </span></em></p>
Black consciousness in South Africa changed blacks and whites.
Ian Macqueen, Lecturer, Department of Historical and Heritage Studies, University of Pretoria
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/105056
2018-10-19T08:44:52Z
2018-10-19T08:44:52Z
Why journalists in South Africa should do some self-reflection
<figure><img src="https://images.theconversation.com/files/241224/original/file-20181018-67185-wv0tdo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Media should be held to the same accountability standards they demand, especially from public representatives. </span> <span class="attribution"><span class="source">EFE-EPA/Kim Ludbrook</span></span></figcaption></figure><p>It is fitting that the <a href="https://www.timeslive.co.za/sunday-times/news/2018-10-13-we-got-it-wrong-and-for-that-we-apologise/">apology</a> by the editor of Sunday Times, South Africa’s biggest newspaper, for its serious lapses in editorial independence and judgement came at the start of a week in which the country celebrates <a href="https://www.sanews.gov.za/south-africa/government-commemorates-media-freedom-day">Media Freedom Day</a>. </p>
<p>Also known as <a href="http://www.saha.org.za/news/2011/November/a_black_wednesday_for_apartheid_sa_and_a_black_tuesday_for_democratic_sa.htm">“Black Wednesday”</a>, the event commemorates the day, in 1977, when the apartheid government arrested, detained and banned anti-apartheid activists and shut down three newspapers. The attack on the media was sustained throughout the 1980s, including two <a href="https://www.sahistory.org.za/topic/state-emergency-south-africa-1960-and-1980s">States of Emergency</a> which severely curtailed freedom of speech.</p>
<p>When celebrating Media Freedom Day in post-apartheid South Africa, it is customary to recall the resistance offered by critical newspapers during apartheid, and rejoice in the freedom now entrenched in the <a href="https://www.gov.za/documents/constitution/constitution-republic-south-africa-1996-1">Constitution</a>. The vital work done by today’s investigative journalists to expose corruption, <a href="https://mg.co.za/article/2018-09-14-00-definition-of-state-capture">state capture</a> and corporate malfeasance is <a href="https://theconversation.com/how-investigative-journalists-helped-turn-the-tide-against-corruption-in-south-africa-93434">rightly féted</a>. </p>
<p>But often forgotten or underplayed is the shadowy side to media history – and contemporary parallels.</p>
<h2>The historical resonances</h2>
<p>Sunday Times editor Bongani Siqoko was apologising for the excesses of his immediate predecessors. These included false allegations about a police “hit squad” in the KwaZulu-Natal province. Another was about a “<a href="https://www.businesslive.co.za/bd/national/2018-10-16-the-sars-rogue-unit-not-unlawful-says-judge-robert-nugent/">rogue unit” at the South African Revenue Services</a>. The apologies stemmed from the fact that the journalists who wrote the articles had not done the proper checks on their sources. And that they were led by the nose to further the agendas of particular politicians wanting to weaken state institutions.</p>
<p>There are historical resonances. The most egregious example of media capture during apartheid was the <a href="https://www.sahistory.org.za/topic/information-scandal">“Information Scandal”</a> in which the then governing National Party attempted to buy the Rand Daily Mail newspaper in order to provide propaganda. When that failed it launched The Citizen, using a secret slush fund. </p>
<p>The Nationalist government could also count on the support of the Afrikaans media, especially the media giant Naspers. As former editor and journalism professor Anton Harber has <a href="https://www.dailymaverick.co.za/article/2018-10-08-ton-vosloos-book-has-lessons-for-todays-political-journalists-who-actively-take-sides/">pointed out</a>, the </p>
<blockquote>
<p>gravest sin of the Afrikaans media was not what it said but what it systematically hid from its public: the forced removals, the prison torture, the slave working conditions, the censorship, the petty segregation, the daily humiliations – all the conditions that defined apartheid and made it so horrifying to the rest of the world.</p>
</blockquote>
<p>Naspers <a href="https://www.dailymaverick.co.za/article/2015-03-03-a-cultural-weapon-how-afrikaans-arts-journalists-found-breathing-space-in-apartheid-sa/">refused to testify</a> before the Truth and Reconciliation Commission about their role under apartheid, leading to a group of renegade journalists <a href="http://www.justice.gov.za/trc/media%5C1997%5C9709/s970926g.htm">submitting their own affidavits</a>. An apology for the newspaper group’s complicity with successive apartheid regimes was only made at the <a href="https://www.news24.com/SouthAfrica/News/Naspers-apologises-for-its-role-in-apartheid-20150725">company’s centenary</a> in 2015.</p>
<p>Although the mainstream English-language press were more critical of apartheid, theirs was often a liberal opposition aligned with mining capital, and offered <a href="https://www.mediamonitoringafrica.org/images/uploads/trc.pdf">from a white perspective</a>. The Black press and alternative media, often harassed, sued, threatened and driven underground, were the ones that paid the highest price for their principles.</p>
<h2>Crisis of conscience</h2>
<p>South African journalism again faces a crisis of conscience. <a href="https://www.news24.com/Tags/Companies/the_new_age">The New Age</a> newspaper and its <a href="https://theconversation.com/axing-ann7-in-south-africa-may-send-wrong-signal-for-media-freedom-91180">sister channel ANN7</a> were widely seen as an attempt by the controversial Gupta-family to <a href="https://www.dailymaverick.co.za/opinionista/2018-07-05-the-new-age-experiment-governments-attempt-to-control-the-media-has-done-industry-no-favours/">extend their state capture agenda</a> to the media sphere. And the close relationship between the executive chairman of Independent Media, Iqbal Survé, and members of the African National Congress, has repeatedly <a href="https://www.timeslive.co.za/sunday-times/news/2017-05-14-iqbal-surv-canned-editor-over-brian-molefe-article/">raised questions</a> about editorial independence at the group’s publications. </p>
<p>Added to the extremely serious ethical lapses by the Sunday Times is the ongoing concern that South Africa’s mainstream media does not listen to and reflect closely enough the <a href="https://theconversation.com/voices-of-the-poor-are-missing-from-south-africas-media-53068">voices of the poor</a>. What gives these issues a global backdrop is the rise of a <a href="https://www.news24.com/Columnists/GuestColumn/in-the-twitter-trenches-how-fake-news-influences-journalism-20170126">“post-truth” era</a> where politicians have used the public’s distrust in the media to serve their own agendas.</p>
<p>In this context, media <a href="https://www.oeaw.ac.at/cmc/research/media-accountability-media-change/media-ethics-and-media-accountability/mapping-media-accountability-international-trends-and-perspectives/">accountability and transparency</a> are key. If journalists demand accountability from the state and politicians, they too should be accountable to the public. </p>
<h2>Investigation into editorial integrity</h2>
<p>Apologising to the public and parting ways with the <a href="https://ewn.co.za/2018/10/14/sunday-times-parts-ways-with-mzilikazi-wa-afrika-and-stephan-hofstatter">offending journalists </a> was the honourable thing for the Sunday Times to do. Without action a press code can become merely a smokescreen. More needs to be done. </p>
<p>Instead of exchanging the usual platitudes about the Fourth Estate and patting one other on the back, journalists should do some soul searching. In view of this, the three Sunday Times journalists responsible for the series of contentious stories would do well to heed <a href="https://www.news24.com/Columnists/MaxduPreez/the-case-for-sunday-times-journalists-to-come-clean-20181016">calls</a> by experienced investigative <a href="https://www.news24.com/Columnists/GuestColumn/exposing-the-puppet-masters-behind-the-sunday-times-scandal-20181016">journalists</a> to reveal their sources. </p>
<p>At first glance, the call might go against established journalistic ethos. But this ethical rule is meant to protect vulnerable whistleblowers, not manipulative crooks. The fear is that naming sources might have a chilling effect on future investigations. But this doesn’t quite apply here. Those who fed the journalists lies were driven by sinister motives. They imperilled, rather than advanced the public interest. Exposing them might be the only way to get to the root of a much wider political rot – which is at the core of what good journalism should be doing anyway. </p>
<p>The South African National Editors’ Forum has announced that it will <a href="https://citizen.co.za/news/south-africa/2023805/sanef-to-start-probe-over-sunday-times-fake-news/">launch an investigation</a> into editorial integrity at the Sunday Times. It has rightly emphasised its preference for self regulation over statutory regulation. But, for self regulation to work well enough to restore public trust, this investigation should extend beyond the Sunday Times to consider the state of ethical awareness and practice across newsrooms. The extensive body of academic research on ethics and journalism practices would also be a valuable resource.</p>
<p>The editors’ forum would be well-advised to ensure that its investigation involves members of the public to establish participatory and “open” <a href="https://www.tandfonline.com/doi/abs/10.1080/1461670X.2014.950882?journalCode=rjos20">ethics</a>. Thankfully, the <a href="http://www.presscouncil.org.za/">Press Council of South Africa</a>, the independent co-regulatory body set up to safeguard ethical journalism, has significant public representation. This signals the importance of co-regulation as a public good rather than an insider-only affair. </p>
<p>The public has a right to know why these lapses occurred, why those that spoke up against them were silenced, and why the basic journalistic rule of corroborating sources was not followed. Siqoko deserves praise for his apology. It might sting now, but it is bound to pay off in the long term. Integrity does not come cheap.</p><img src="https://counter.theconversation.com/content/105056/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Herman Wasserman does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
South Africans have a right to know why the lapses at Sunday Times occurred and why those that spoke up against them were silenced.
Herman Wasserman, Professor of Media Studies and Director of the Centre for Film and Media Studies, University of Cape Town
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/85911
2017-10-19T08:19:00Z
2017-10-19T08:19:00Z
South Africa’s media should beware of being the voice of only some
<figure><img src="https://images.theconversation.com/files/190871/original/file-20171018-32367-4rspeo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Reuters/Siphiwe Sibeko</span></span></figcaption></figure><p><a href="http://www.sanews.gov.za/south-africa/address-president-jacob-zuma-freedom-day-celebrations">Media Freedom Day</a> in South Africa marks the day in 1977 when the apartheid government <a href="https://www.iol.co.za/sundayindependent/remembering-qobozas-sense-of-duty-1594527#.ViI2CX4rLnA">banned</a> two newspapers - World and Weekend World - and a church journal, Pro Veritate, along with <a href="http://www.sahistory.org.za/article/black-consciousness-movement-bcm">18 black consciousness organisations</a>. A number of <a href="http://www.thejournalist.org.za/the-craft/learning-past-october-19th-message">journalists were also detained</a>.</p>
<p>One purpose of commemorating the day is to keep the memory alive so that people are more sensitive to contemporary trends that may again lead the country down the path of repression.</p>
<p>What does the picture look like today? </p>
<p>First some optimism: South African citizens would not have known the extent of the mess the country is in had it not been for the tireless efforts of investigative journalists that uncovered widespread corruption, brought the <a href="http://www.gupta-leaks.com/">Guptaleaks</a> and exposed Bell Pottinger’s complicity in <a href="https://www.timeslive.co.za/news/south-africa/2017-09-04-bell-pottinger-guilty-of-exploiting-racial-tensions-on-behalf-of-guptas/">stirring up racial tensions</a>.</p>
<p>But that’s where the good news ends.</p>
<h2>Cause for concern</h2>
<p>Media freedom continues to face external threats in the form of <a href="http://aidc.org.za/media-freedom-south-africa-two-part-formula-securing-freedom-expression/">legislation, intimidation, harassment and surveillance</a>. </p>
<p>Another major area of concern is that the South African media is not diverse enough: not in terms of ownership nor <a href="https://www.dailymaverick.co.za/opinionista/2016-08-29-media-content-diversity-in-sa-why-is-government-still-asking-all-the-wrong-questions/#.WedRZluCz3g">diversity of perspectives</a>. This lack of diversity makes it harder for the media to claim to represent the public. </p>
<p>Even worse, the only significant “change” to media ownership this year turned out to be a cynical ploy to buy influence. This was the “purchase” of the Gupta-owned television station <a href="http://www.ann7.com/">ANN7</a> and <a href="http://www.thenewage.co.za/">The New Age </a> newspaper by their staunch defender and erstwhile government spokesperson <a href="https://www.dailymaverick.co.za/article/2017-09-10-analysis-whats-behind-the-sale-of-the-new-age-and-ann7-to-jimmy-manyi/#.WeYbJFuCz3g">Mzwanele Jimmy Manyi</a>. All it achieved was to give media transformation a bad name.</p>
<p>The country is also on the back foot when it comes the public broadcaster. South Africans are supposed to have one that works in the public interest and acts as a countervailing force to big commercial interests in the media. But, the South African Broadcasting Corporation (SABC) has been a mess for several years, hobbled by <a href="http://ewn.co.za/2017/04/25/sabc-board-chairperson-reveals-broadcaster-short-of-funds">financial woes</a> and <a href="http://ewn.co.za/2017/09/22/khoza-i-m-glad-hlaudi-motsoeneng-is-out-of-the-sabc">mismanagement</a>.</p>
<p>Political interference in the running of public broadcaster runs all the way to President Jacob Zuma. After sitting on the recommendations for the new SABC board for weeks, the board he finally appointed included a <a href="http://ewn.co.za/2017/10/17/mantashe-new-sabc-chairperson-raises-eyebrows">controversial chairperson and deputy</a>. He also appointed yet another Minister of Communications, the seventh in so many years, suggesting that communications just <a href="http://ewn.co.za/2017/10/17/media-watchdog-bemoans-yet-another-communications-minister">isn’t a priority for government</a>. </p>
<p>But threats to media freedom don’t always come from the outside, from security agencies or politicians. Media freedom also gets hollowed out in more subtle ways. Even if all the usual threats were to be solved, the questions remain: what does the South African media do with its freedom? How well does the media serve the interests of all the country’s citizens?</p>
<h2>Media as monitor</h2>
<p>One of the consequences of having had to fight so hard to protect the space for a free media in post-apartheid South Africa has been that the media has defined its primary role in relation to government, often in a highly antagonistic way. But being a watchdog is only one possible role for the media. It <a href="https://books.google.co.za/books/about/Normative_Theories_of_the_Media.html?id=jZAWo25gwY0C&redir_esc=y">could also play</a> others: a facilitative role that fosters dialogue with civil society, a radical role that opposes authority or a collaborative role that creates partnerships between media and the state around shared interests.</p>
<p>The problem with the media’s watchdog work is that it’s tended to foreground issues that are mainly of interest to an elite. This is partly because of increased commercial pressures on legacy media (newspapers, radio and television). As elsewhere in the world, South African audiences <a href="http://www.journalism.co.za/wp-content/uploads/2017/04/STATE-OF-THE-NEWSROOM-2015_2016_FINAL.pdf">increasingly move to free, digital platforms</a>, disrupting legacy media’s business model as they go. The combination of a media oriented towards lucrative markets and focused almost exclusively on monitoring government, can present a one-dimensional view - or a <a href="http://www.tandfonline.com/doi/abs/10.1080/02560054.2011.578887">“view from the suburbs”</a>.</p>
<h2>Disconnect</h2>
<p>Research shows that the South African media often doesn’t succeed in gaining the trust of audiences outside of the mainstream elite, such as the <a href="http://theconversation.com/voices-of-the-poor-are-missing-from-south-africas-media-53068">poor</a> or the <a href="http://www.tandfonline.com/doi/abs/10.1080/02533952.2014.929304">youth</a>. </p>
<p>The disconnect between mainstream media and audiences on the margins of society is perhaps best illustrated by the way media report on community protests: routinely covered only insofar as they present an inconvenience for the middle classes. Attempts to engage with protesters, find out why they were protesting, why they don’t opt for other forms of engagement and what has led to the breakdown in trust, are rare - partly as a result of <a href="http://www.tandfonline.com/doi/abs/10.1080/23743670.2017.1292703">constraints on journalists</a>. </p>
<p>By adding to the marginalisation of these citizens, the media is in danger of being associated with narrow or sectarian interests.</p>
<p>Importantly, it needs to be borne in mind that media freedom exists not only for the media but to serve all citizens. The South African media have done exemplary work on many fronts in recent years. Yet, for media freedom to become deeply entrenched in the country’s democracy, it should strive to listen even more widely and more intently to the voices of those that are still not within earshot of the mainstream news. </p>
<p>In doing so – especially in a communications landscape awash with propaganda, fake news and spin – the media would gain the trust of citizens and find more allies in their much-needed resistance to the creeping authoritarianism in South African society.</p><img src="https://counter.theconversation.com/content/85911/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Herman Wasserman does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Forty years after the apartheid regime clamped down on the free press, South Africa’s media continues to face threats, albeit in more subtle forms than in the past.
Herman Wasserman, Professor of Media Studies and Director of the Centre for Film and Media Studies, University of Cape Town
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/85868
2017-10-18T15:04:49Z
2017-10-18T15:04:49Z
Why media freedom remains fragile in South Africa
<figure><img src="https://images.theconversation.com/files/190831/original/file-20171018-32345-18kfusq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Demonstrators protest against the decision by the South African Broadcasting Corporation to stop airing violent protest scenes.
</span> <span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span></figcaption></figure><p>Four decades after the <a href="http://www.apartheidmuseum.org/sites/default/files/files/BIKO%203b.pdf">Black Wednesday</a> crackdown on the media and the black consciousness movement, South Africa is a different country. Freedom of expression is guaranteed in the <a href="https://www.gov.za/DOCUMENTS/CONSTITUTION/constitution-republic-south-africa-1996-1">constitution</a> and a <a href="http://www.constitutionalcourt.org.za/site/constitution/english-web/ch9.html">slew of institutions</a> and laws support the guarantee. At the same time, powerful groups continue to seek ways to limit and undermine journalism.</p>
<p>On October 19, 1977, two South African newspapers - World and Weekend World - and a church journal - Pro Veritate - <a href="https://www.iol.co.za/sundayindependent/remembering-qobozas-sense-of-duty-1594527#.ViI2CX4rLnA">were closed</a>, journalists were banned and detained and some 18 organisations of the black consciousness movement were banned. Since then, the country’s journalists have marked the day as Media Freedom Day.</p>
<p>The 1977 crackdown went further than even the apartheid cabinet of the time had decided: cabinet minutes from the day before, laboriously written in longhand in leather-covered volumes held in the national archives, record the decision that the World newspaper “be suspended for a week” and that the editor Percy Qoboza and others be detained. The Weekend World is not mentioned. </p>
<p>In fact, both papers were banned permanently. There are other differences: the list of organisations actually closed is much longer than was decided by <a href="http://www.sahistory.org.za/dated-event/bj-vorster-steps-down-prime-minster">Prime Minister BJ Vorster’s</a> cabinet.</p>
<p>One can speculate about the reasons for the difference between decision and implementation – perhaps the powerful apartheid police simply thought they knew better than their political bosses.</p>
<p>Black Wednesday remains a particularly brutal act of repression in a long line of attempts to silence critical media voices. There have been many victims, before and since. </p>
<p>What’s clear is that the battle for media freedom in South Africa isn’t over. Attacks on journalists continue – whether in the form of physical intimidation or through the threat of new legal measures that seek to restrict the media’s ability to do its job. And the online world has opened up new frontiers that need defending. </p>
<h2>Targeting journalists</h2>
<p>Journalism is under attack from a number of quarters.</p>
<p>A number of laws and bills contain problematical provisions. The board of the World Association of Newspapers and News Publishers, who met in Durban in June, <a href="https://www.timeslive.co.za/news/south-africa/2017-06-12-worlds-press-calls-for-renewed-solidarity-in-the-wake-of-threats-to-independent-free-media-in-sa/">highlighted concerns</a> with bills on cybersecurity, hate crimes and films and publications as infringing on media freedom. </p>
<p>Then there’s the Protection of State Information Bill (generally called the<br>
<a href="https://www.hrw.org/news/2013/04/29/south-africa-secrecy-bill-improved-still-flawed">Secrecy Bill</a>, whose problematical provisions include an overly broad definition of the national interest and which would severely restrict the freedom to report. The bill was passed in 2013 but is still awaiting signature on President Jacob Zuma’s desk. </p>
<p>There also appears to be a concerted move to reopen the debate around a <a href="http://www.news24.com/SouthAfrica/News/contentious-media-tribunal-still-on-the-cards-20170708">Media Appeals Tribunal</a> through a parliamentary inquiry, which would subject the media to regulation by Parliament. </p>
<p>Also, this year has seen attempts to intimidate and threaten journalists, most notably by Black First Land First <a href="http://ewn.co.za/2017/07/28/police-criticised-for-failing-to-stop-blf-harassment">(BLF)</a> and other proxies in what has become known as the <a href="http://pari.org.za/betrayal-promise-report/">state capture project</a>. This has involved attempts by powerful individuals and groups to shape South Africa’s political and economic landscape through corrupt relationships and deals to benefit their own private interests. After BLF’s protest at the home of former Business Day editor Peter Bruce in June turned violent, the South African National Editors Forum obtained a <a href="http://ewn.co.za/2017/08/09/all-journalists-now-protected-against-blf-harassment">court interdict</a> against the organisation and its leader Andile Mngxitama.
As the forum’s chairperson Mahlatse Gallens pointed out in her response to the court ruling:</p>
<blockquote>
<p>They have specifically targeted journalists that have done in-depth reporting on allegations of corruption and state capture. We will not be deterred.</p>
</blockquote>
<p>These kinds of attacks attest to the strength and importance of journalism in present-day South Africa. From exposes on the <a href="https://mg.co.za/article/2009-12-04-zumas-r65m-nkandla-splurge">Nkandla scandal</a> to the <a href="http://www.news24.com/SouthAfrica/News/gupta-leakscom-everything-you-ever-need-to-know-about-guptaleaks-in-one-place-20170721">Gupta emails</a>, which detailed the extent of <a href="http://www.news24.com/SouthAfrica/News/download-the-full-state-of-capture-pdf-20161102">state capture</a>, journalistic investigations have set the public agenda. Government ministers have been forced to account and <a href="https://www.theguardian.com/media/2017/sep/07/bell-pottinger-could-go-under-within-days-sources-claim">international corporations</a> have been ruined following exposure of their complicity. </p>
<p>When around 1000 of the world’s investigative journalists gather for the <a href="https://www.wits.ac.za/news/latest-news/general-news/2017/2017-10/global-investigative-journalism-conference-programme-released.html">Global Investigative Journalism Conference</a> at Wits University in a few weeks – the first time the event is held in Africa - the South African experience will be of considerable interest.</p>
<h2>Media freedom in a changed era</h2>
<p>Attacks and threats to media freedom are a mark of the importance of journalism, but the effects are felt by the citizenry at large. <a href="https://www.ivir.nl/publicaties/download/Current_threats_journalism.pdf">As the Council of Europe</a> pointed out in a paper on protecting journalists, interference with media freedom </p>
<blockquote>
<p>is simultaneously an interference with the public’s right to receive information or ideas.</p>
</blockquote>
<p>The constitutionally guaranteed right to free expression is mainly about citizens’ right to be informed; journalists hold it in trust for the broader public. Journalism and its organisations have not always been successful in making that point clear.</p>
<p>Seen in that light, the media freedom discussion needs to broaden out and take into account developments which do not amount to direct attempts to harass journalists, but damage their ability to do this important work in other ways.</p>
<p>The long-standing business model of journalistic media is in terminal decline as audiences move to online and social media. Legacy media companies are under <a href="http://www.journalism.co.za/wp-content/uploads/2014/10/State-of-the-newsroom-2014.pdf">intense financial pressure</a> and staffing levels in newsrooms keep dropping. Investment in the time and effort to do journalism of quality is way down.</p>
<p>At the same time, the growth of online platforms has led to an explosion of available information. In many senses, this has been positive, but it has also opened the door to abuse. The campaign in support of state capture involved the extensive use of social media for <a href="https://www.timeslive.co.za/news/south-africa/2017-09-04-how-the-gupta-campaign-weaponised-social-media/">cyber-bullying </a> and to create the illusion of a groundswell of opinion that does not exist.</p>
<p>The use of information as a weapon is not new - propaganda is as old as the hills, and South African political and factional campaigns have often made use of leaks as a form of warfare. But we seem to be entering a new phase where it becomes harder and harder to distinguish real exposes from the false kind. Some journalists and media outlets, in some cases liberally supported by public funding, are allowing themselves to be used for factional ends.</p>
<p>Trust is journalism’s most valuable asset. In an era of fake news, that trust is harmed not only by what the media themselves may do, but by what is done by pedlars of misinformation, who are often hard to distinguish from professional journalists.</p>
<p>A loss of trust may in the long run cause more harm to journalism than the repressive tactics of past decades.</p><img src="https://counter.theconversation.com/content/85868/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Franz Krüger is head of the journalism programme at Wits University. He is a member of the SA National Editors Forum. </span></em></p>
As South Africa marks Media Freedom Day, it’s clear that its battle isn’t over. Attacks on journalists continue –through physical intimidation and there’s also the threat of new laws.
Franz Krüger, Adjunct Professor of Journalism and Director of the Wits Radio Academy, University of the Witwatersrand
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/59849
2016-05-23T14:53:26Z
2016-05-23T14:53:26Z
UK Treasury Brexit report is overly negative
<p>Over 90 pages, the British Treasury’s latest <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/524967/hm_treasury_analysis_the_immediate_economic_impact_of_leaving_the_eu_web.pdf">report on the EU referendum</a> attempts to identify the short-term economic effects of a vote to leave on June 23 – aka Brexit. When the Treasury tweeted the publication late on the morning of May 23 it was billed a “detailed and rigorous analysis on the immediate impact of leaving the EU”. So how does it stack up?</p>
<p>Not surprisingly, the department of George Osborne, chancellor of the exchequer, is forecasting an economic downturn in the days and weeks after a Brexit vote. As the chancellor writes in his foreword to the report:</p>
<blockquote>
<p>A vote to leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession and lead to an increase in unemployment of around 500,000, GDP would be 3.6% smaller, average real wages would be lower, inflation higher, sterling weaker, house prices would be hit and public borrowing would rise compared with a vote to remain.</p>
</blockquote>
<p>A companion to the Treasury’s <a href="https://theconversation.com/can-we-believe-what-the-treasury-says-about-the-cost-of-brexit-58015">report on long-term effects</a> published last month, it models two scenarios for what could happen on Brexit: a “shock scenario” and a “severe shock scenario”. It models for a 12% fall in the exchange rate or a more severe 15% fall, for instance. Inflation could be 2.3% higher or 2.7% higher; while GDP would be 3.6% lower in the shock scenario but 6% lower if it’s more severe. House prices are modelled to drop by either 10% or 18%. </p>
<p>These effects definitely look plausible, particularly the exchange rate depreciation. In September 1992, the month of <a href="https://www.theguardian.com/business/2012/sep/13/black-wednesday-20-years-pound-erm">Black Wednesday</a>, when Britain was forced to withdraw from the European Exchange Rate Mechanism, sterling <a href="http://www.bankofengland.co.uk/boeapps/iadb/fromshowcolumns.asp?Travel=NIxIRxSUx&FromSeries=1&ToSeries=50&DAT=RNG&FD=1&FM=Jan&FY=1963&TD=23&TM=May&TY=2016&VFD=Y&html.x=22&html.y=15&CSVF=TT&C=IIN&Filter=N">dropped</a> 10.5%. </p>
<p>I can’t fault the Treasury’s econometric methodology either. It uses a technique called <a href="https://www.otexts.org/fpp/9/2">vector autoregressive analysis</a>, which jointly estimates equations for eight indicators of UK economic conditions: economic uncertainty, consumption, business investment, GDP price deflator, the Bank of England base rate, and financial risk indicators related to household borrowing, business borrowing and the stock market. </p>
<p>The technique takes into account how these variables have been affected over the longer term and the possible effect of global financial conditions. It is also the perfect case study for econometrics students answering exam questions on whether it is worth estimating models such as these because, as we teach them, these models either overlook or fail to accurately measure all the necessary variables and are therefore wrong. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=795&fit=crop&dpr=1 600w, https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=795&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=795&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=999&fit=crop&dpr=1 754w, https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=999&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=999&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Ignore her ladyship?</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/cat.mhtml?lang=en&language=en&ref_site=photo&search_source=search_form&version=llv1&anyorall=all&safesearch=1&use_local_boost=1&autocomplete_id=&searchterm=bank%20of%20england&show_color_wheel=1&orient=&commercial_ok=&media_type=images&search_cat=&searchtermx=&photographer_name=&people_gender=&people_age=&people_ethnicity=&people_number=&color=&page=1&inline=387259570">Johnsey</a></span>
</figcaption>
</figure>
<h2>Bank managing</h2>
<p>Having said that, a possible criticism of the methodology is that it implicitly assumes that the impact of the Brexit shock is independent of the “state” of the economy. It does not allow for any intervention by the Bank of England, for instance. It assumes that the bank remains a passive spectator, conveniently hiding behind the <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/524967/hm_treasury_analysis_the_immediate_economic_impact_of_leaving_the_eu_web.pdf">excuse that</a> the Treasury should not “pre-suppose how monetary policymakers would balance higher inflation from the fall in sterling with the reduction in demand and supply”. </p>
<p>Ignoring the possibility of the Bank of England attempting to stave off the recession by cutting the base rate below zero and/or authorising additional quantitative easing arguably leads the Treasury to a more negative view of Brexit than would otherwise have been the case. </p>
<p>So while forecasting major economic upheaval seems reasonable, the validity of the Treasury’s estimates could definitely have been strengthened by factoring in what the Old Lady of Threadneedle Street might do. Brexit supporters will probably seize on this point. But hold on a second. Have they not <a href="http://news.sky.com/story/1696463/carney-defends-brexit-recession-warning">repeatedly argued</a> against Mark Carney, the BoE governor, talking about Brexit and considering its effects? Stand by while they probably try to have their cake and eat it.</p><img src="https://counter.theconversation.com/content/59849/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Costas Milas does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Part two of British chancellor George Osborne’s case for staying put is realistic but flawed.
Costas Milas, Professor of Finance, University of Liverpool
Licensed as Creative Commons – attribution, no derivatives.