#35. Politics – a new template, part 1

BRITISH POLITICS AND THE MARCH OF THE CORPORATE

Throughout the post-war period, and very probably for a lot longer than that, we have been accustomed to thinking about politics in terms of “left” and “right”. In this article, I explain, first, why this is no longer a useful template, if indeed if it ever really was.

Second, I’m going to provide you with an alternative template which, I think, gives us a much more useful insight into how politics really works. This template divides politics. not into Left and Right but between the Libertarian (or individualist) and the Corporatist (or collective).

My conclusion, in brief, is that a modest move to the Right in British politics has been very much less important  than a very pronounced move away from the Libertarian and towards the Corporatist.

This is the product of much thought, because I’ve long been dissatisfied with the traditional “Left-Right” definitions. I invite you to consider it, to think about how it applies to the political scene and, of course, to contribute to the discussion here.

Let’s start with the traditional “right-left” alignment, pictured in fig. 1. This is how most of us have been taught to think about politics, and is typified by questions like these: “did Tony Blair move Labour to the right?”; “is UKIP a right-wing party?”; “is David Cameron more/less right-wing than Mrs Thatcher?”; and so on.

The general assumption is that the “Left” favours state intervention whereas the “Right” prefers private enterprise. Starting in the centre and moving Leftwards, then, we might progress via social democracy and socialism to communism, presumably ending up with Stalin’s Russia (or Fidel’s Cuba) at the “Far Left” of the chart. Going Rightwards from the middle, we go past Conservatives and Neo-Cons before finishing with a “Far Right” regime like, say, that of Mussolini’s Fascists.

Here, of course, is the first big snag – the extremes of Left and Right look pretty much the same. Was there all that much difference between, say, the U.S.S.R. in its heyday and Fascist Italy? They differed, certainly, but in many more important respects – such as the suppression of liberty – they had much more in common. And where do we put Hitler – does “National Socialism” really belong on the Left or the Right? Those who automatically place Nazi Germany on the extreme Right might be hard pressed to explain how Nazi butchery was different from the Stalinist brand. And was the Gestapo much worse than the KGB? I rather doubt it.

At a much less extreme level, can we really say that David Cameron is more or less Right wing than Mrs Thatcher – isn’t it likelier that he is to the right of her on some things, but to the left of her on others?

In short, the traditional Left-Right analysis is so full of holes and inconsistencies that it provides very little in the way of useful insights.

Fig. 1: Left-Right – the traditional paradigmPolitical diagram 1

My suggested alternative “direction of travel” is pictured in fig. 2. Instead of Left and Right we have Top and Bottom, labelled “Libertarian” and “Corporatist”.

By “Libertarian” I mean a situation in which the maximum degree of choice is permitted to the individual, whilst “Corporatist” is its polar opposite, where organisations (of many different types) exercise power at the expense of individual choice. To be extreme about it, you could place anarchism at the very top of the chart and, at the extreme bottom, George Orwell’s 1984.

I’ve used the word “Libertarian” because “Liberal” has been corrupted beyond redemption. Those on the so-called “Left” of politics often call themselves “Liberals”, but so, too, do those “Right”-wing enthusiasts for unfettered private enterprise.

The term “Corporatist” is not by any means limited to large private sector enterprises. Rather, it refers to any organisation capable of exercising power over the individual, a definition which includes, for example, government departments, government itself, political parties, any form of “collective” and, indeed, some religious organisations.

Fig. 2: Top to bottom – a new directionPolitical diagram 2

The characteristics of a “Corporate” entity are pretty well understood, but will bear brief reiteration here.

First, and perhaps because human beings have a natural need to belong to a group, corporates tend to have a cohesion based on loyalty to the organisation. The danger here, of course, is that loyalty to the organisation can all too easily transcend other loyalties.

An example here might be the use of gagging orders to prevent former members from “blowing the whistle” on the organisation. The widespread use of gagging orders in the NHS, which came to light in the aftermath of the Stafford scandal, was a classic instance of the imposition of organisational loyalty in way which was detrimental to the broader community. One of Benjamin Disraeli’s most famous remarks – “damn your principles, stick to your party!” – aptly typifies the way in which internal loyalty to an organisation can all too easily triumph over broader loyalties.

The second characteristic of the corporate body is the power that it can exercise, through numbers of loyalists, through wealth and influence, and through a sense of purpose which, being specific to the organisation, may be inimical to the broader public interest.

Together, internal loyalty and external power can all too easily result in insularity, in which the realities of the outside world come to be seen as less important than what is happening within the organisation.

Reflecting this, the fourth characteristic of the corporate body is the tendency to expansion. The tendency to growth is implicit within most organisations, and is a dynamic which operates largely independently of conscious intent.

Today, for example, the Foreign & Commonwealth Office employs roughly fifteen times as many people as it did a century ago when, as the Foreign & Colonial Office, it was responsible for administering almost half of the globe. Likewise, the combination of the departments of War, Air and Admiralty into the Ministry of Defence in 1964 was intended to reduce bureaucratic overhead yet, by 2010, the MoD employed some 75,000 civilians, a number which exceeded the combined uniformed strength of the Royal Navy and the Royal Air Force!

These are just some of the reasons why we should treat corporate power with suspicion.
Where, then, does Britain stand on the gradient between the individual and the collective? Fig. 3 tries to put some context into this by sketching the movements of the two main parties over recent decades.

Fig. 3: Britain – directions of political travelPolitical diagram 3

This diagram has two axes – Left versus Right, and Libertarian versus Corporatist.

From the era of Harold Wilson and Jim Callaghan, Labour moved to the Left before swinging sharply to the Right under Tony Blair. This did not (as some have claimed) turn Labour into a Right-wing party, but it did remove most of the ideological differences between Labour and the Conservatives.

The Tory party, meanwhile, moved to the Right as the generation of Ted Heath was replaced by the followers of Margaret Thatcher, and it might be argued that the party has moved somewhat further to the Right since then, at least in terms of public spending and the introduction of private enterprise into the public services.

There has, then, been a Rightwards move in the centre of gravity of British politics since the heyday of Heath and Wilson. Going back still further, the term “Buttskellism”, compounded of the surnames of R.A. Butler (Conservative) and Hugh Gaitskell (Labour) was coined to indicate the lack of any real ideological difference between the two parties in the period from 1950 to 1963. Such a term could not have been employed in the 1970s or 1980s, but something similar might, I think, have been compounded not that long ago, perhaps as “Blaguism”, derived from Tony Blair and William Hague.

In my analysis, the move towards the Right has been far less marked, and much less significant, than the swing from Libertarianism towards Corporatism. Labour, traditionally a pretty Libertarian party, became much less so during 1997-2010, when “sofa government” and the party machine tightened their grip at the expense of the Party Conference, local parties and even the Cabinet. There has been a similar direction of travel in the Conservative Party, which not so long ago was fiercely defensive of individual liberties (as, in fairness, many of its members still are).

Overall, then, the Rightwards drift in British politics has been far less pronounced, and much less significant, than the swing from Libertarian to Corporatist, from individualism to the collective.

Before looking (in Part 2) at what the implications of this swing might be – and I believe that these implications are overwhelmingly negative – I’ll leave you with a chart which attempts to locate the current standings of the parties on my “Political Grid” (fig. 4).

As we have seen, both Labour and the Conservatives have moved a very long way from the Libertarian towards the Corporate. The Liberal Democrats remain, in my analysis, somewhat to the Left of Labour, and are somewhat more Libertarian (or less Corporatist) than the larger parties.

The most interesting position here, I believe, is that of UKIP. Nigel Farage’s party, though well known for its loathing of the European bureaucracy, seems to me to be pretty anti-bureaucratic at home as well. Whilst I see no reason to locate UKIP either to the Right or the Left of the Conservatives to any meaningful degree, the party does seem to be far more Libertarian, which is very probably why UKIP appeals so strongly to those who feel excluded from the traditional politics of Labour, the Conservatives and the Liberal Democrats.

I’m going to conclude this discussion for now by extending a warm invitation to comment.

In part 2, I will endeavour to explain why the general drift from the Libertarian to the Corporatist has been so corrosive, not just of liberties but also of economic performance.

Fig. 4: Britain – current “Political Grid” locationsPolitical diagram 4

28 thoughts on “#35. Politics – a new template, part 1

  1. Dr Morgan – I very much like your ideas and the clear diagrams. Two things spring to mind. The first is that today most politicians come out of the same stable (PPE at Oxford, political researcher etc) with notable exceptions (Cable, Farage, for example) so perhaps it is not surprising that we hear so much common speak although disguised under the relevant political label. The second is whether the tilt to the corporatist is a reflection of the decline of the Westphalian nation-state system and allegiance to supranational bodies (whether this are multinationals – Amazon, google etc, or political – Brussels). The issue is what one can usefully do about it without getting depressed.

    • David

      Thank you. First, I’m sure you’re right about the common career paths of politicians – a commonality that I suspect links directly to their general ineptitude.

      Second, I don’t know if yours is the explanation, but I wonder if there is a somewhat simpler explanation – multinationals are now so powerful that they can pressure governments to bias society (including laws, taxes and regulation) in their favour?

      In part 2, I aim to show quite how much damage corporatism does to our society. The issue after that is whether our politicians are so in hock to, or in awe of, the corporates to actually do anything about it.

  2. Tim,

    I think that this is a very astute assessment, and is pretty much bang on the money. It very much fits in with my recent thinking which has been about the issues of complexity, focussing on the writings of Joseph Tainter. Tainter points out that increasing complexity (meaning both more institutions and institutions with more functions) has been one of our main approaches to problem solving. As an example of this increasing complexity he highlights America’s response to 9/11, which involved creating the TSA and department of homeland security, and introducing more restrictions on passenger behaviour.

    I think that the bloated size of our institutions and their attempts to regulate more and more human behaviour, as you point out, is a result of this increase in complexity, but we’re approaching a point where the growth of these institutions is starting to do more harm than good. However the only response we have to problems is to try to throw more complexity at them, which eventually leads to diminishing returns, as the 75,001st employee at the MoD will be of much less use to the organisation than the 75th. It seems quite a vicious cycle.

    • Thank you, Sam, and you anticipate some of what I’ll be saying in part 2. I’m quite convinced that corporatism is harmful, not just in the private sector but in the public sector as well.

  3. I’ve just seen Panorama – we are paying £28 billion a year in ‘in work’ benefits so that Tesco et all can pay their directors multi million pound salaries – oh and all that Housing Benefit paid to private tenants whose landlords don’t declare it for tax……………..

    • Thanks – much the same is happening in America, where the state-by-state presence of two large corporations (in particular) correlates closely with welfare costs. Corporates are good at avoiding what economists call “externalities” – the cost (or benefit) of one’s activities to the broader society.

      As I said in a report last week, I think the direction of travel – high employment but low wages – is the wrong strategy for Britain. If a low wage economy was best, Ghana would be richer than Germany. Low wages mean that people have to borrow to sustain their lifestyles, or even to pay for the basics. As Henry Ford saw it – when he paid very generous wages to his car workers – well-paid workers can afford to buy things (including his cars!), i.e. good wages boost demand.

  4. Dr Tim said:

    “multinationals are now so powerful that they can pressure governments to bias society (including laws, taxes and regulation) in their favour?”

    There I think you are spot on. The Continental countries try to regulate more in favour of the citizen.

    In general, it’s a complex question, and there are more than just 2 dimensions in politics, so the left-right axis is not particularly useful in any case. I suspect the current bias to big business is an unintended consequence of Thatcherism, and if Mrs T was alive and well and in sound mind, she might regret this, though she was loath ever to admit any mistakes publicly.

    What astonished me about Mrs Thatcher was how she became a icon even to the Labour Party. Tony Blair, when PM, made a show of publicly inviting her into Downing Street (but not Ted Heath or Jim Callaghan), and Gordon Brown, when PM, did the same. And then last year Mrs Thatcher was given a state funeral – the first for an ex-PM since Churchill’s in 1965. What do you make of the symbolism of this, Dr Tim?

    • I agree. About Mrs T. I believe that she was basically a Libertarian. She privatised businesses, but she did not privatise public services. I think we need to remember that she came to power when Britain was massively in debt and was in chaos (the “winter of discontent”), when “the establishment” wanted to do a deal with the union barons (i.e. surrender), and the same “establishment” was almost wholly against retaking the Falklands (thank goodness she was backed up by Admiral Sir Henry Leach).

      In part 2, I’ll endeavour to explain the harm that corporatism (state as well as private) does to society and the economy.

    • “There I think you are spot on. The Continental countries try to regulate more in favour of the citizen. ”

      I’m not sure which countries you’re thinking of Adam. As I see Europe, they are significantly more corporatist than the UK (although Westminster is busy trying to fix that). So all the major European countries have demonstrably higher taxes, higher public spending, and more regulation in almost all areas. There is widespread need for permits and public sector chits to do many things, identity cards are common, along with plenty of rules about trivia like where and when pedestrians can cross the road. Have a look at the relative rankings for how easy it is to do business in these different countries:
      http://www.doingbusiness.org/rankings
      And then reflect that the greater difficulty of doing business in the EU is not because the EU states have worked to preserve individual liberty, but because they approach (small) business the same way they approach citizens – a group to monitored, controlled, instructed, and force fed “public services”. This even extends to things like energy costs where (for example, 49% of a German consumer’s electricity bill is made up of state mandated charges, levies and taxes. Don’t feel too left out, because the UK government will ensure UK bills reach a similar position by perhaps 2025, whilst bitterly and dishonestly complaining that it is the fault of the suppliers.

    • Hi Badger,

      Businesses large and small do of course need regulation, to protect the state, the consumer and the individual against possible abuse of their power. The question is, how do we find a good balance? You might say that the Continentals did not have enough regulations in place when they implemented the euro, of course, but clearly we Anglo-Saxons were guilty of negligence as regards the banks. The citizen has ended up paying the bill for the banks in the UK and the US.

      Now, Dr Tim used to be in finance – maybe still is. When the tumbrils come out again, will he say, “It’s a fair cop!” or alternatively “It wasn’t me – honest!” ? So I put it to you, Dr Tim (in a caring way, of course), “What did you know – and when did you know it?”

    • In reply to Adam, above, I should start by saying that I worked as a consultant, not a London-based employee, after the early 90s. The only bit of it I really liked was/is research, and being office-based in London meant interruptions, committee meetings, and an inability to distance oneself as much as I liked for my research to be objective. So I worked from home, going to London only for meetings. Also, I specialised in oil and gas until ’07.

      A long time before that, I worked out that the world was creating a debt bubble. My first non-oil research report warned that Britain was dicing with a debt vortex (I’ve been criticised for that, but I stand by that view). Another report urged clients to get out of “growth” stocks and buy solid, boring, cash-rich counter-cyclical staples.

      My role at Tullett was terrific – management gave me an autonomy that few if any other City firms would have accepted. My boss was Terry Smith, an analyst himself and a fearless teller of the facts. In that time I warned a lot – culminating in “Project Armageddon” (about the UK) – and wrote about the plight of a younger generation ripped off by their elders. I also wrote a report blaming the riots on frustrated materialism promoted by corporates and the dreadful examples set by those in power – not a “typical” City or Street view! I even advocated building council houses……

      Finally, bad practice has gone on, but mostly in banking (I never worked in that). Yet the vast majority of City people are decent and honest, even though Big Bang created huge temptations for a minority, and diluted the highly ethical and trust-based culture that had existed pre-Big Bang.

  5. So good, Dr. Tim, that I’d like to buy you a pint on the strength of this.
    This isn’t just hitting the nail on the head, it’s driving the nail firmly enough to pin the 3 (now 4 ?) boards of Brit politics into position.

    For many years, I paid minimal attention at all to politics, though I’ve always voted.
    Having been either a company director or self-employed since I was 21, you can guess how.

    I’ve paid way more attention since 9/11/2001 & the Iraq war of 2003, both based on a bunch of lies.
    The expenses scandal & the global warming scam also grabbed my attention, more lies.
    Honesty is fled from Brit politics. Nobody now expects truth from Brit politicians.

    I’ve discerned the same patterns as you have, the rise of corporate power & the fading of political parties, even as they become more identical, veering not very far from the centre as they strive for popular support. They are losing this support wholesale as people realise that these parties never do what they print in their manifestos, never mind what they spout verbally. To retain any semblance of major support, they now want 16 year olds to vote. Mamma Mia.

    Were they not pushed down our throats 24/7 by our controlled media, these major parties would be seen in truer perspective, trending toward irrelevance, a distraction from the real powers governing our past, present & future, the corporates. One corporate sector that would repay study is the major print & TV News Media, now effectively propaganda organs for the state & the major corporates. The BBC, in particular, I now think of as a New World Order propaganda factory.
    Nigel Farage’s UKIP has risen in the face of “fair & impartial” BEEB’s sidelineling, ignoring, derision & joyful exposure of any faults. The BBC part in the global warming con is nothing short of a National disgrace, a huge scandal, in which Tony Blair is complicit

    The media are, however, bit part players, purveyors of false impressions for their masters.

    The major sector I have focused on is banking.

    The banksters own the corporates, & control them through proxies.
    The bank of England is touted as a nationalised concern, while it is in fact a private limited company, whose shareholders remain anonymous. It is not difficult to google : who owns the BOE.
    Mervyn King, ex Head of the BOE is on record as saying of all banking systems, we have the worst. & he should know.

    The banksters also own the politicians, virtually all of whom yearn for a non-executive directorship or 3 to cushion their later years after all that hard graft in the deeply subsidised Westminster bars.
    When the degenerate gambler banksters went broke in 2008, our spineless pols voted to put their debts on the taxpayers backs, an act so immoral it angers me every time I think of it.

    This is no longer capitalism. When bent mega-banks are deemed “too big to fail”, we are out of the realms of capitalism.
    When govt functions more in the interests of corporates than its population, we are into fascism.

    I think I see the major problems of this country & Western society, & I believe I see the major trends forward. Not wishing to steal any thunder, I’ll refrain from getting into that till I’ve read part 2 which I’m most looking forward to.

    Thanks for your very clear article, Dr. Tim, & anytime you fancy that pint…

    Cheers,
    JD.

  6. I totally agree with Tim’s analysis of what has happened.

    I am uncomfortable with the term “Libertarian” because it seems to relate specifically to individuals, whereas Tim’s argument applies to “the system” as a whole.

    A way of looking at the same process, in the public sector, is how top-down power has gradually overwhelmed all kinds of bottom-up organisation. Driven by the self-interest of those with the assumed power to centralise. I suppose this is what happened in the private sector – from the corner shops I remember to TESCOs today.

    In the 1930s economist Sidney Webb a leading light in the Fabian Society, coined the phrase “the inevitability of gradualness”, when advocating the bureaucratisation of The State. An economist indeed!

    Interestingly, here in Herefordshire (UK), we are seeing the emergence of a new, neither left nor right, political party in “our” local authority – http://www.itsourcounty.org/ – which may be relevant to Tim’s model.

    I look forward to Part 2.

    • Thanks for this. The arrogance that we see from government entities (and from local government too) is reflective of the top-down attitude.

      I’ve changed my original plan – part 2, now posted, looks at private corporations; part 3 will look at public sector and government; and part 4 will discuss what might be done about all this.

    • I agree with not liking the term “libertarian” as it has too many anti-government, survivalist, sod everybody else tags to it. I prefer the comparison between a street market and corporatism, for example a supermarket. They both sell the same stuff to the same people. However they do it in very different ways. the supermarket requires a lot of capital, hierarchical control, disciplined staff and loyalty. The street market is mostly self organising, self disciplining, requires little capital, and competes within itself (i.e. no loyalty). However few street market traders become rich, while all supermarket chain CEO’s do, which probably tells why corporatism has become so favoured by the political class. Labour have always favoured corporatism as they have been a top down party since their socialist roots, the Tory’s since the sixties when the old landed class was eclipsed by those backed by big City and corporate money i.e. Ted Heath. The rot has been going on a long time.

  7. Much to agree with here but I wouldn’t describe New Labour as ‘turning right’ in 1997. The frontman Tony Blair’s job was to give an impression of ‘right wing’ respectability to dupe gullible middle class voters. Peter Mandelson ( a former marxist and member of the Young communist league) was the real architect of new Labour.
    New Labour was a revolutionary left wing government committed to massive wealth redistribution (through family credits and expansion of personal and government credit), as well as having aspirations in changing the fabric of Britain itself through mass immigration.It also had ambitions in changing the way Britain is governed by abolishing centuries old traditions.
    There is nothing really right wing atall about Labour then or now. We are still struggling to recover from New Labour’s legacy.

  8. On Dr Morgan’s point about ideological differences, in my view these were pretty much destroyed when Gideon Osborne agreed to match Labour spending plans just a few months before crash #1. All the guff about ‘sharing the proceeds of growth etc.’ was swallowed hook line and sinker much to the Conservative Party’s shame. The Conservative Mp Howard flight was actually sacked for daring to suggest public spending should be cut..right in the middle of Brown”s unhinged spending binge.

  9. Thanks for your potted bio, Dr Tim. Yes – somewhere in your youth or childhood, you must have done something good. 😉 No guillotine required, then. 🙂

    You claim that UKIP seems to be pretty anti-bureaucratic. Yet does their leader have the energy of a Thatcher for a bout of creative destruction: to tear structures down and build them anew? Yet even given UKIP’s Thatcherite tilt, are their policies still wise or possible? Given your bleak warning about the depleted resources and diminishing returns, will any form of capitalism, which depends on continued economic growth, be possible in the future?

    Not quite on topic, but an enlightening view of the world situation from Larry Elliott of the Guardian:

    http://www.theguardian.com/business/2014/oct/12/world-leaders-war-games-financial-crisis

  10. Thank you for that!

    I don’t think we know about UKIP, but there’s only one thing that voters seem to care about – whatever their virtues or vices, UKIP are not Tory, Labour or Lib Dem….

    Larry Elliott’s article is interesting. Now, for those who share my views, growth is over, we’re playing extend and pretend, maintaining a semblance of normality on borrowed and printed money – so the next crash is inevitable (and may now, I feel, be pretty close).

    So, cut to my series (this being part 1) on corporatism. It is bad for the economy, for equity, for governance and so on. But, up to now our politicians have had the task of sharing out growth – not easy, to be sure – but a stroll in the park compared with sharing out deterioration.

    In “good” times, our increasingly corporatist system is regrettable – but in bad times it won’t be just a nuisance, it will be A DISASTER. Trying to maintain the disproportionate wealth of the few at a time when growth is over and we’re getting poorer (the reality for some years now, I believe) will become completely unacceptable.

    So, either the system is reformed, or it will be smashed. For reform to work, there must be greater equity – and those who benefit from the current system aren’t going to surrender their perks and privileges without a fight.

  11. It has been said that the establishment in the UK was sufficiently scared by the French & Russian Revolutions to make enough concessions to prevent revolution. King George the 5th’s refusal to give the Tsar asylum in the UK, and his treatment of the first Labour Government are good examples, as is The Queens willingness to meet Martin McGuinness (who admires her) and Gerry Adams.

    The question is however are our current or future politicians as astute.

    • The years before WWI were characterised by bitter labour disputes, and during the War the authorities were uncomfortably aware that they had taught millions of working class men to use guns – and that many might have hung on to their issued firearms. So it was an extreme case. Similar applies to the years after 1789.

      My first reaction to your question is that most of our current politicians are arrogant rather than astute – very much a “let them eat brioche” Ancien Regime. But they have a lot of cunning – just wait for the dirty tricks campaign that will now be waged against UKIP, is my guess.

      Time will tell – and not a lot of time.

  12. Pingback: #36. Politics – a new template, part 2 | surplusenergyeconomics

  13. “By “Libertarian” I mean a situation in which the maximum degree of choice is permitted to the individual, whilst “Corporatist” is its polar opposite, where organisations (of many different types) exercise power at the expense of individual choice. ”

    Hi Tim, the danger is that in the current framework of capitalism the individual is likely to not have enough free will or individuality to take on the corporatist and similarly individual choice in the current framework is normally subject to “situational selfishness” where by as Monbiot describes in his latest post how selfish individualism has played into then corporatists game plan.

    Movements such as Concsious Capitalism perhaps offer the best starting point for a new political paradigm. Is it time to reclaim democracy and work collectively so that we can all live well?

    • Thank you, some very good points for me to reflect on.

      One thing I’d say is that we don’t really have capitalism any more – what we have is corporatism. Capitalism relies on distribution of economic power, not concentration of markets. It relies on maximised access to information, whereas the corporate promotional machine exists to channel information selectively. It relies on a framework that is fair to all, something we don’t have.

      The irony of capitalism is that, without regulation, capitalism turns into monopoly, thereby ceasing to be capitalism. So capitalism has a constant need to be “saved from itself”, which is one reason why I believe in a mixed economy, not something that is totally “free market” or totally statist.

  14. Pingback: #47. Britain – the dangerous democratic deficit | surplusenergyeconomics

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