Tuesday 13 September 2011, 14:06
The guiding idea at the heart of today's political system is freedom of choice. The belief that if you apply the ideals of the free market to all sorts of areas in society, people will be liberated from the dead hand of government. The wants and desires of individuals then become the primary motor of society.
But this has led to a very peculiar paradox. In politics today we have no choice at all. Quite simply There Is No Alternative.
That was fine when the system was working well. But since 2008 there has been a rolling economic crisis, and the system increasingly seems unable to rescue itself. You would expect that in response to such a crisis new, alternative ideas would emerge. But this hasn't happened.
Nobody - not just from the left, but from anywhere - has come forward and tried to grab the public imagination with a vision of a different way to organise and manage society.
It's a bit odd - and I thought I would tell a number of stories about why we find it impossible to imagine any alternative. Why we have become so possessed by the ideology of our age that we cannot think outside it.
The first story is called:
CARRY ON THINKING
It is about the rise of the modern Think Tank and how in a very strange way they have made thinking impossible.
Think Tanks surround politics today and are the very things that are supposed to generate new ideas. But if you go back and look at how they rose up - at who invented them and why - you discover they are not quite what they seem. That in reality they may have nothing to do with genuinely developing new ideas, but have become a branch of the PR industry whose aim is to do the very opposite - to endlessly prop up and reinforce today's accepted political wisdom.
So successful have they been in this task that many Think Tanks have actually become serious obstacles to really thinking about new and inspiring visions of how to change society for the better.
It is also a fantastically rich story about English life that takes you into a world that's a bit like Jonathan Coe's wonderful novel 'What a Carve Up', but for real. It is a rollicking saga that involves all sorts of things not normally associated with think tanks - chickens, pirate radio, retired colonels, Jean Paul Sartre, Screaming Lord Sutch, and at its heart is a dramatic and brutal killing committed by one of the very men who helped bring about the resurgence of the free market in Britain.
A couple of months ago the British branch of an obscure right wing think tank called the International Policy Network reportedly fell apart. The leaders apparently had an argument about climate change. Noone noticed and it was hardly mentioned in the newspapers.
But behind the IPN is the door to a forgotten history. The key to that door is the chairwoman of the IPN, Linda Whetstone.
Linda is very well connected. She is the mother of Rachel Whetstone who is the head of Global Communications for Google. And Rachel is the partner of the super-wonk Steve Hilton - he is David Cameron's personal adviser in No. 10.
Linda Whetstone believes passionately in the Free Market and hates state intervention practically more than anyone else on the planet. Here she is letting rip at the Conservative party conference in 1978. Great shirt. And notice that even Mrs Thatcher sitting on the platform behind Linda looks a little frightened.
But the most interesting - and influential - member of the family is Linda's father from whom she inherited her fervour for the free market. He was called Sir Antony Fisher and he invented the first modern think tank back in the 1950s. The Institute for Economic Affairs. It is the template for practically all the think tanks today.
Fisher himself would go on to found another 150 think tanks around the world.
But back in the early 1950s he was an isolated figure who felt completely at odds with the mood of his time. He worked with his friend Major Oliver Smedley in pokey offices in an old alleyway in the City of London, called Austin Friars. Together Fisher and Smedley were fighting a lonely battle against the state planning that was trying to reconstruct Britain after the war - because they were convinced that it was going to lead to a totalitarian state and the end of democracy.
Fisher and Smedley had met at a fringe organisation called The Society of Individualists. They became friends because they were both convinced that the innocuous-looking, state-run Milk Marketing Board and Egg Marketing Board were actually the enemies of freedom. Major Smedley had formed an organisation called The Cheap Food League, and his first pamphlet had a wonderful title:
Antony Fisher was an intense, ascetic man who had been to Eton and Cambridge. He was a Christian Scientist and was prone to deep depressions. He spent much of the time running a farm in Sussex and was convinced that communists had infiltrated the establishment (which, of course they had).
Smedley was more the action man, he kept on creating groups with names like The Council for the Reduction of Taxation, and he also ran the Reliance School of Investment from Austin Friars - which gave out diplomas which apparently even Smedley himself admitted were completely unaccredited. There was also an accountant who had been in prison for forging cheques. The bank manager the accountant had swindled committed suicide.
Men like Fisher and Smedley were at the very margins of respectability in the 1950s, and the media never bothered with them.
They were ignored because practically all politicians and commentators from left and right believed in the Keynsian idea that the state should intervene to manage the economy. Everyone was convinced that left to itself the free-market led to disaster - as had happened in the 1930s. Fisher was a Conservative while Smedley was a Liberal - but both believed that their parties were leading Britain into the abyss - seduced by the false dreams of the planners.
Here is one fragment I have found of Major Smedley at the Liberal Party Conference in 1961 ranting against the Common Market. He had just founded another group - called Keep Britain Out. He hated the Common Market because it was yet another attempt to plan and control agriculture. The audience slow hand-clap him off. And the programme then approvingly interviews an earnest liberal who believes in planning.
To their opponents Fisher and Smedley were right-wing dinosaurs. But they both were convinced they were a part of the future - because they believed they had scientific proof that state planning was doomed.
Back in 1947 Fisher had read an article in Reader's Digest by an Austrian economist called Friederich Hayek. It was a summary of a book Hayek had written called the Road to Serfdom and it set out to prove scientifically that any attempt by politicians to plan and organise society so people could be free and have a better life would inevitably produce the opposite - the destruction of freedom and democracy
So one day Fisher plucked up courage and went to see Hayek at the LSE in London where Hayek was a professor. Fisher asked Hayek for advice - should he go into politics to try and stop the oncoming disaster?
Hayek told Fisher bluntly that this would be useless because politicians are trapped by the prevailing public opinion. Instead, Hayek said, Fisher should try and do something much more ambitious - he should try and change the very way politicians think - and the way to do that was to alter the climate of opinion that surrounded the political class. Fisher wrote down what Hayek said to him.
"He explained his view that the decisive influence in the battle of ideas and policy was wielded by intellectuals whom he characterised as the 'second-hand dealer in ideas'."
Hayek told Fisher to set up what he called a "scholarly institute" that would operate as a dealer in second-hand ideas. It's sole aim should be to persuade journalists and opinion-formers that state planning was leading to a totalitarian nightmare, and that the only way to rescue Britain was by bringing back the free market. If they did this successfully - that would put pressure on the politicians, and Fisher would change the course of history.
Antony Fisher was gripped by this vision. But then all his cattle died of Foot and Mouth. He got compensation from the government though (which unkind people might say was a subsidy) and went off on a trip to America.
In New York Fisher met another right-wing economist called "Baldy" Harper who introduced him to two new ideas. One was the concept of the "think tank", the other was broiler chicken farming.
Fisher brought both back to Britain. First of all he set up a company called Buxted Chickens, with tens of thousands of chickens being reared in a new mass way. He had introduced factory farming to Britain. Technology allowed him to cut costs massively and make what had previously been a luxury food available to everyone. And all without government subsidy - it showed what the free market could do.
But factory farming also became controversial. Here is part of a documentary the BBC made in the 1960s. It has a great character in the factory-farmer - a follower of the methods Fisher had pioneered - interviewed driving around in his Rolls Royce. He asserts that if a chicken is fat it must be happy. This leads to a very peculiar argument about whether there were fat people in the Nazi concentration camps and, if so, were they happy? It's a great example of the strange places that BBC editorial balance can lead you.
Antony Fisher made a fortune out of Buxted Chickens. He and Smedley then used the money to set up the first real think tank in Britain at their office in Austin Friars. It was called The Institute For Economic Affairs. And, as Professor Hayek hoped, it was going to change the course of history in a very big way.
The idea of the Think Tank had been invented in America. It's main roots lay in the research and development groups set up by the government and military during the war. Their aim in a time of crisis was to think imaginatively, to develop genuinely new ways of solving problems that would contribute to the war effort. This continued after the war with the RAND Corporation in California which was a Think Tank funded by the government. It was staffed by scientists, economists and social scientists all struggling to think of new ways of dealing not just with the dangers of the Cold War but also imagining new futures and new concepts of how society could work.
Here they are thinking:
The Think Tank that Antony Fisher set up was very different. It had no interest in thinking up new ideas because it already knew the "truth". It already had all the ideas it needed laid out in Professor Hayek's books. Its aim instead was to influence public opinion - through promoting those ideas.
It was a big shift away from the RAND model - you gave up being the manufacturing dept for ideas and instead became the sales and promotion dept for what Hayek had bluntly called "second-hand ideas".
To do this Fisher and Smedley knew they had to disguise what they were really up to. In 1955 Smedley wrote to Fisher - telling him bluntly that the new Institute had to be "cagey" about what its real function was. It should pretend to be non-political and neutral, but in reality they both knew that would be a front.
The IEA would masquerade as a "scholarly institute", as Hayek had suggested to Fisher, while behind that it would really function as an ideologically motivated PR organisation. It was, Smedley wrote:
"Imperative that we should give no indication in our literature that we are working to educate the Public along certain lines which might be interpreted as having a political bias. In other words, if we said openly that we were re-teaching the economics of the free-market, it might enable our enemies to question the charitableness of our motives. That is why the first draft (of the Institute's aims) is written in rather cagey terms."
But what was it that Fisher and Smedley were selling? The conventional wisdom about Friedrich Hayek is that he wanted to bring back 19th century laissez faire - to recreate a lost past.
The reality is far more science-fiction.
The real victor at the end of the second world war had been the ideology of science. A new, powerful group of technocrats had risen up in America, Britain and the Soviet Union who had used scientific ideas to plan and organise the war effort. They now believed they could apply the same methods in peacetime - to transform their societies.
State planning was technocratic and was thus seen as the way forward. Old conservative ideas of free trade were seen as traditional and non-scientific, and thus bad.
Hayek's solution was to turn this round. He made the idea of the free market technocratic as well. He transformed it from being a fusty old set of prejudices and traditions into a scientifically based free-market system for the modern age.
He did this by turning Adam Smith's idea of the Invisible Hand into a cybernetic system of information exchange. He said that all the knowledge of a society is dispersed among millions of people. But each person only knows just a few fragments of the whole, and no one person can know or comprehend all that knowledge. Instead those millions of people are constantly sending "abstract signals" to each other, and out of that comes the "pricing system". And out of that comes order without central control.
He even gave the whole theory a new science-like name. He called it Catallaxy.
Here are some sections of Hayek being interviewed in 1977 - they give a good sense of his technocratic and almost robotic vision of society - what he calls "a self-directing automatic signalling system".
But Hayek didn't see himself as a robot but as a revolutionary - he believed that power must be seized in order to create what he calls a "stabilisation crisis" in Britain in order to bring about his new world.
The key to making this system work, Hayek said, was allowing information to flow freely around society. Governments tried to do the opposite - to control the flow of information so they could manage the signals.
And in the mid 1960s Major Oliver Smedley - the action man - decided he was going to do more than just PR for Hayek's theory. He was going to try and break the creeping government monopoly of information in order to free up the "signalling system".
And to do it he was going to create Pirate Radio in Britain.
Smedley got the idea from one of the legendary figures in the London theatre world of the 1950s. She was called Dorothy "Kitty" Black and she translated plays by Jean Paul Sartre, Cocteau and Anouilh so they could be put on in London. When she was on the continent seeing Sartre she discovered the first pirate radio station in the world - off the coast of Denmark. Kitty came back and she and a friend called Allan Crawford suggested the idea to Oliver Smedley.
Here is a picture of Kitty
Smedley thought it was a brilliant idea, and together they set up Project Atlanta. They bought an old boat from America and began to fit it out. But Smedley and the others soon found themselves in a race with a music promoter called Rohan O'Rahilly who had got his own boat. After lots of arguments they all ended up by amalgamating, and in the summer of 1964 Smedley's boat started broadcasting off the coast of Essex as Radio Caroline South, while Ronan O'Rahilly's boat was Radio Caroline North.
Radio Caroline was an immediate success. In the media mythology of the 1960s it is seen as part of the rebellious counterculture. In reality it had been deliberately created by the New Right - as a part of their counter-revolution.
By now Smedley and Antony Fisher had had a terrible argument - and their paths had diverged. But Smedley was deliberately using Radio Caroline as a weapon to promote Hayek's theories about the freedom of information.
In 1965 the IEA published a booklet that made this clear. It's aim was to "lay out the philosophical and political theory behing Pirate Radio". It concluded with a section called "Piracy as a Business Force". The new heroes it said were the "privateers" who were going to open up the system of information flow - so the market could work efficiently.
Smedley's opponent was the Postmaster General - Tony Benn. Here is Benn in 1964 fulminating about Pirate radio because it was breaking the rules of copyright. This is the same argument that would reappear with the cyber-utopians of the 1990s.
Reg really was a "privateer" and a true modern pirate. And at this point Major Smedley found that his vision of the free market got a bit sticky.
Reg is really the hero of this whole story. He was a bucaneering kind of pop promoter and entrepreneur that emerged in the music business in the 1950s and 60s. He was a working class boy who had gone into the music business in the late 50s as it morphed from rock and roll to pop. He had set up his own school to create new stars in a derelict mansion near Rugby. He called it "The School of Rock n Roll". Here is a picture of Reg surrounded by his shock troops who were going to assault the charts - one of them was his answer to Elvis Presley - called "Eddie Sex". Another one was called "Buddy Britten".
Reg Calvert was a part of the new confident individualism that was bubbling up in working class Britain in the late 50s - and would find its way into both the music business and the art schools of the early 60s.
Here is a wonderful photograph of Reg lowering a glitter ball down to his wife Dorothy. They are taking it to a show they were putting on in Southampton.
It was given to me by Reg's daughter, Susan Moore. She told me that her father hated all politicians - and the one thing that drove him was the feeling "that he didn't want to be controlled by anyone"
A hero of our time.
Then Reg found David Sutch - renamed him Screaming Lord Sutch - and created a star. Reg persuaded Sutch to stand as a candidate in the byelection in 1963 that had resulted because of the scandal of the War minister John Profumo - which involved prostitutes and spies, and Sutch became a national figure.
Here is a wonderful fly on the wall documentary I found that was made about Screaming Lord Sutch in 1965. It has brilliant long hand-held takes of Sutch performing in a tiny club in an unnamed town. He is a strange hybrid of early American garage-band sound crossed with Victorian music hall. His version of Jack the Ripper at the end is great. Unfortunately it was filmed just after Jimmy Page left as the band's guitarist, and a couple of month's before Ritchie Blackmore joined.
With hindsight it is also very sad. In the film Sutch is filmed at home, living with his mother. He always remained very close to her and, after she died Sutch - who had been plagued by depression - hung himself in his mother's house.
Then Reg decided he was going to set up his own Pirate Radio Station. Instead of a boat he took over an old gun fort in the Thames Estuary. It was called Shivering Sands. To begin with it was called Radio Sutch, but then it became Radio City. Reg Calvert ran it as a true privateer, doing some of the disc jockeying himself. It was all a bit haphazard - once Reg spent the whole evening reading out Lady Chatterley's Lover to the South of England.
Here is a fragment of Reg at work on Shivering Sands. It is followed by a great shot of the engineer and the transmitter.
Major Oliver Smedley didn't like this competition - so he did what all good free-marketeers do. He created a monopoly.
He went to Reg and persuaded him to amalgamate with Radio Caroline - and become part of the pirate network. In return Smedley promised to give Reg a brand new transmitter - which would be much more powerful.
But then things went wrong.
When the transmitter was delivered it turned out to be rubbish. So Reg refused to pay Smedley any of the promised revenues from Radio City. And it also looked like Ronan O'Rahilly might be conspiring with Reg. Smedley was furious and, ever the action man, he decided he was going to raid Reg's radio station in revenge. He hired a tug and got together a group of riggers led by "Big Alf" and late one night Smedley, Alf, and Jean-Paul Sartre's friend and translator - Kitty, went out and boarded the fort.
They forced their way into the control room and stole the crystal which was the key part of the transmitter.
And the newspapers loved it - the Pirates go to war with each other.
The Express got an exclusive. A picture of Big Alf chatting and having tea with his hostages on the fort. I think it's quite obvious which one is Big Alf.
But Reg Calvert was furious. The next evening he drove down from London to Oliver Smedley's cottage outside a small village in Essex. He got there at about 11pm and started hammering and banging on the door. Major Smedley's secretary opened the door and Reg burst in.
Smedley then shot Reg Calvert with a shotgun, and Reg died immediately.
Noone knows what really happened that night. Oliver Smedley was arrested put on trial for manslaughter. But he claimed that he had acted in self-defence - believing that Reg Calvert was lunging forward to kill him. The jury acquitted him. But Reg's friends and family believe that Smedley had acted far more out of anger and a desire to destroy something that was standing in his way. And that Smedley only walked free because he was an upper-class Major.
And it was a bit odd. The police transcripts of one witness who was there paint a picture of Smedley as a man who seemed out of control that night.
Susan, Reg's daughter has written a wonderful and moving play about her father's life and tragic death. It is called "Reg". She is also directing it herself. It is at the Abbey Theatre in Nuneaton on Friday 4th November at 7.30pm. Everyone should go.
The killing also had bad consequences for "Kitty" Black. When Jean-Paul Sartre heard about the shooting and the right-wing crowd she had been associating with he refused to let her translate any more of his plays.
But Big Alf did well out of it - he knew how to handle the modern media.
A historian called Adrian Johns has written a brilliant book about Pirate Radio in the 1960s, called Death of a Pirate. In it he argues that Reg Calvert and Oliver Smedley represent two completely different kinds of "privateer".
Reg Calvert was part of an old, unruly tradition of true independence and libertarian freedom. A real bucaneer who would ignore rules and the structure of class and power in Britain while merrily going his own way.
Smedley on the other hand was a "privateer" only to the extent that he wanted to bring the private sector back to power in Britain. Other than that he wanted the traditional power structure to remain the same. And to do this he (and his Think Tank) wanted to reinvent the free market as a managed system - managed by them, and any true "privateer" - like Reg - who challenged that power was doomed.
Johns writes about the killing of Calvert.
"At that instant late in Midsummer Night 1966 when Smedley took his fatal decision, two kinds of piracy came into collision. Reg Calvert represented one kind - a kind whose history can be traced back centuries. He was an ingenious and imaginative entrepreneur, opportunistic and ambitious. He spoke in grandiose terms, but his operations were undercapitalized, seat-of-the-pants adventures that might bloom or collapse - as so many radical ventures initially are. The outsider, resistant to all rules.
Calvert represented the kind of pirate that the Institute of Economic Affairs hailed as holding the key to social and cultural progress. But in reality Smedley stood for a different kind of pirate altogether. He was the rational capitalist, well versed in both the maxims of accountancy and the abstract principles of liberal ideology. Privately educated, metropolitan and professional, Smedley saw himself as an agent in the political and cultural affairs of the nation.
It was this that Calvert threatened in 1966 - and what made Calvert so appealing was therefore precisely what also made him so dangerous. And as in military and political life, so in financial and entrepreneurial: Smedley's instinct was to stand fast. Hold his ground."
And the same was true of the ideas of Friedrich Hayek. He wasn't really trying to bring back an old, unpredictable, turbulent laissez-faire system - he wanted to create a new, technocratic system of managed competition that didn't in anyway threaten the existing structure of power.
Historians of the resurgence of economic liberalism have pointed out that, despite his rhetoric, Hayek's theories are very different from laissez-faire, because he wants governments to use their power to enforce and manage what he called "a competitive order" - driven by millions of rational consumers sending abstract signals to each other. And in this way, although his disciples like Fisher and Smedley would hate it, Hayek's vision shared a great deal with the "scientific" planners on the left that he thought were destroying Britain.
BY the early 1970s something weird was happening to the British economy. Inflation and unemployment started to go up at the same time - a combination that the government planners said was impossible. As a result the IEA began to move from the margins to the centre of political life - because they said it was exactly what they and Hayek had been predicting. It was the unforeseen consequences of trying to control the complex system.
Faced by the chaos the Conservative government under Edward Heath set up their own think tank. It was called the Central Policy Review Staff. But, unlike the IEA, it was an old-fashioned think tank that wanted to think up some new ideas to solve the crisis. The only problem was that they couldn't think of any - and it soon became a joke. Here is part of a lovely episode of Are You Being Served where the staff of Grace Brothers decide to set up their own Think Tank, just like the government.
In 1975 Mrs Thatcher became the leader of the Conservatives and, guided by her close ally Sir Keith Joseph, she turned to the Institute of Economic Affairs to create the policies for a future government.
What Fisher and Smedley had dreamt of twenty years before had finally happened. Once upon a time their Think Tank had been marginalised and despised - now it was at the centre of a counter-revolution that was about to triumph.
Back in 1992 I made a film about how this happened. It was called The League of Gentlemen, and was part of the Pandora's Box series about science and politics. Here is a section about how the IEA persuaded the Thatcher government to adopt Monetarism.
The "scientific" theory of Monetarism was necessary, the IEA said, to get rid of inflation, to force it out of the system. Trades unions were causing inflation through their wage claims - and that was disrupting the proper working of Hayek's "pricing system". It was corrupting and distorting the "abstract signals" that people sent around the system.
The technocratic theory said that the solution was for governments to pull a lever and take money out of the system - and so restore the proper signalling process.
And Hayek's vision would be realised.
The two men interviewed in the film at the IEA are Ralph Harris and Arthur Seldon. They were both disciples of Hayek that Fisher and Smedley had installed to run the IEA.
The League Of Gentlemen then showed how in reality this led to a disaster - mass unemployment and the closing of great swathes of British manufacturing. As the film shows, the theory of monetarism was then ruthlessly discarded - and there is a wonderful bit of Mrs Thatcher being interviewed in 1985 when she completely denies that she ever believed in it.
But that didn't mean that Mrs Thatcher was going to give up on Hayek's vision. Most of British industry might have disappeared - but she believed that the free market utopia could still be created, this time by the banks and financial world .
Faced by the disastrous collapse of manufacturing some of the economists who had been the true believers in the Hayek revolution began to have their doubts. At the end of the film, Sir Alan Budd who was one of the chief architects of Thatcher's policies gave an extraordinarily honest - and revealing interview.
He says that he worried that he and his ideas had been ruthlessly used. That what he calls the "capitalist class" had simply seen in the ideas a way to engineer a crisis of capitalism that led to mass unemployment.
As a result of that unemployment unions were smashed, wages forced down - and the capitalist class managed to make high profits again.
And instead of giving the workers higher wages - the bankers lent them money. Simple really.
Meanwhile Smedley's career had gone into decline. He was always fighting by-elections as the anti-European candidate, and he always lost. Here is a fragment of him in 1977 - he is the other candidate who has to be mentioned at the end of a news report.
And as always the thing that worries is him is government control of food.
Antony Fisher on the other hand prospered and became powerful. In 1981 he set up The Atlas Economic Research Foundation that created Think Tanks across the world, all of them copies of the IEA. In all he set up 150 Think Tanks worldwide.
When Fisher and Smedley set up their original Think Tank in 1955 they were practically alone. Now politics in Britain is dominated by Think Tanks, and almost all of them are copies of what Fisher and Smedley first invented. They are ideologically motivated PR organisations masquerading as the sort of scholarly institute that Hayek first suggested to Antony Fisher
And what's more, most of these Think Tanks, whether on the left or right are peddling Hayek's ideology in some form another - a managed and technocratic version of the free market as the central dynamic of society.
They have different versions of this - and they vary in how the government should use its power to bring this about, and how far it should extend into society - but at bottom they are all pushing the same fundamental idea. There is no alternative vision on offer. And this points to a very strange fact. That while all the think tanks constantly promote new concepts of how to micro-manage today's free-market technocracy, none of them have come up with a genuinely new grand idea for a very long time.
And the question is whether most Think Tanks may actually be preventing people thinking of new visions of how society could be organised - and made fairer and freer. That in reality they have become the armoured shell that surrounds all politics, constantly setting the agenda through their PR operations which they then feed to the press, and that prevents genuinely new ideas breaking through.
Meanwhile the managed free-market system that Antony Fisher, Major Oliver Smedley, and Professor Hayek dreamed of has triumphed. And just as Smedley wanted, back in 1966, the elite doesn't change and isn't threatened by the real pirates and privateers. The system has maintained the protected position of the ruling elite in this country.
And here they are - with Rachel Whetstone, Antony Fisher's grandaughter, at the heart of them.
This is a section from a wonderful film made by Michael Cockerell in 2005 about Michael Howard who was then leader of the Conservative party. Cockerell is the most brilliant political journalist in the BBC - not just because he tells stories so well - but because he has an uncanny instinct to capture stuff on camera that then turns out to be important.
It is a skill he shows in this film - for here is the record of Rachel Whetstone, who was then Michael Howard's adviser, with the young David Cameron and George Osborne - all advising the hapless Michael Howard to go and give a public speech to Goldman Sachs - because that was the place to be seen.
And that's that in Britain. Until, of course, the real pirates come back.
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