Lord Skidelsky

Obituary and Interview

Lord Skidelsky was an economic historian and the leading biographer of both John Maynard Keynes and Oswald Mosley.

The half-Jewish son of British subjects of Russian origin, he was born in Harbin, Manchuria, where his parents had fled in 1917. His family ran the largest coal mine in the region before they were interned by the Japanese during the Second World War, and were released in exchange for Japanese internees in England.

After boarding at Brighton College, Skidelsky read history at Oxford, where he completed a PhD in 1967 on ‘Politicians and the Slump’, which examined the response of British politicians to the Great Depression. Skidelsky was always an intellectual renegade. His 1975 biography of Oswald Mosley led to Johns Hopkins refusing him tenure on the grounds that it was insufficiently critical. Skidelsky had spent an extended period of time with Mosley whilst he wrote his biography, and he treated the leader of the British Union Fascists — as any historian should — critically, but not simply as a pariah, and with sincere interest in his subject. Oxford also refused to give him a job, and after some time teaching at North London Polytechnic, he was appointed as a Professor at the University of Warwick, where he spent the rest of his career.

Skidelsky then began writing his three-volume biography of John Maynard Keynes at a time when Keynesianism was widely considered to be dead. Prior to Skidelsky, the only complete biography of Keynes was written by Keynes’ disciple Roy Harrod. Harrod, to avoid tarnishing Keynes, and thus Keynesianism — as well as to avoid embarrassing Keynes’ wife — completely skipped over his colourful private life (and much else). This was a multi-decade project: the first volume was published in 1983, the second in 1992, and the third in 2000. It remains the definitive biography today.

His career in politics was no different. Originally a member of the Labour Party, he then joined the SDP. In 1991, he was made a life peer, and in 1992, he took the Conservative Party whip. However, his term as opposition spokesman for the Conservatives in the House of Lords was cut short by his sacking by William Hague on the grounds of his opposition to NATO bombing of Serbia; thereafter, he sat as a cross-bencher. After the financial crash, he moved back towards the left, and went so far as to endorse Jeremy Corbyn’s campaign in order to broaden the spectrum of debate in Britain.

He remained sensitive to new trends in politics on the left and right — even being a regular reader of this publication — and was a prolific writer and intellectual to his last days. In January, we invited him to lunch, and we were privileged to have a sprawling conversation in our office with him about Keynes, his biography of Mosley, British politics in the twentieth century, and numerous other topics that could not make it in to this interview. We found his work — and our conversation — to be valuable to our thinking for many issues.

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Keynes and Civic Thatcherism

‘Ah, the Cairncross Diaries.’ He seemed pleasantly surprised by the book on the desk. Discussing his own economics, he began by noting his swing in the conservative direction in the late 1970s. ‘The mixed economy, after a very successful period, did succumb to stagflation. Britain seemed to be becoming ungovernable, and Thatcher had a clear view about what was to be done, to reintroduce market forces into the economy. I thought that was right at the time.’

He explained that he wanted to keep a place for Keynes even in his ‘civic Thatcherite’ period. He had left the Labour Party in 1979, and joined the ‘Owenite wing of the SDP’ — underscoring their shared hatred of the Liberal Democrats. ‘The SDP has been called Thatcherism with a human face, but that perhaps is to denigrate it. There were a lot of original ideas about social market economy and such — the German notion of synthesis between market and society attracted me.’

He turned away from the ‘market radicalism’ of the Thatcher government and saw the tolerance of an unemployment rate at the high mark of very nearly 12% as an unacceptable price to pay to restore the market function. Like many economists of his generation, the solution, in his view, lay in a remade corporatist structure. The unions could be (and should have been) taken down a notch, or two, without being fully destroyed — ideally rationalising the unions into larger organisations that the government could reliably deal with. Ending the subsidy of loss-making industries and legislative action to reorganise the unions was clearly necessary. What was then his ‘Civic Thatcherism’ — as opposed to the acceptance of monetarism by Callaghan and Healey on the Labour Right — was a project of careful management and damage-mitigation. ‘I thought the destruction of the unions was bad because it abolished the balance in the economy between different power groups, which put all bargaining in the hands of the business class.’

In Keynes’ day, the policy solutions were always in freeing up markets and labour for business, and necessitated even at the best of times the acceptance of a highly volatile economy in prices and employment for most. The economy of the pre-1914 period and back into the 1920s, with the slow adoption of gold standards globally, and its re-establishment after the war, meant that the norm was long periods of underemployment.

‘In some ways that’s again the orthodox economy of today — take Lord Elliot, Conservative business spokesman in the Lords. He speaks the language of business, what needs to be done to restore confidence is always cut taxes and free up the labour supply — these measures are designed to allow business to do its job, which is to allocate resources efficiently. But never a word about demand. If you end up freeing the labour supply by ultimately suppressing wages, where is the demand going to come from? It’s a distorted view of economics.’

Sufficient demand for goods and services produced in the real economy is the backstop for sound private investment, as distinct from something he wanted to distinguish against mere speculation. ‘Confidence is real — because we don’t know what is going to happen in the future. The idea that you can predict accurately is the basis of rational expectations hypothesis and all of these ideas. They presume that the future can be known probabilistically and so uncertainty isn’t there. For Keynes, uncertainty is at the heart of everything, which is why confidence is crucial. The only issue of business confidence in the orthodox account today is that the government is on their side with the lower tax and flexible labour markets and so on, uncertainty apparently disappears on the market’s efficient allocation of resources as a law. If you dispute this law, uncertainty could come in many places. If you have uncertainty, you have liquidity preference, because people have uses for money other than just to invest in industry. If they don’t see a return on investment, they speculate. So you have what Keynes called the speculative motive. That’s a lot of what happened after the financial crash — the government instructed the central bank to pump a lot of money into the economy in the hope it would get the economy going. A lot of it went into speculation on real estate and all kinds of processes. Who would want to invest in an economy in which there isn’t demand?’

The speculative motive arises when there isn’t confidence for business to invest in ‘real things’ — that is, plant and infrastructure. Though all investment is based on an element of uncertainty, ‘the trick’ of the Keynesian system’s guarantee of full employment, and thereby to demand for the goods and services produced was the buffer on speculation: the difference between building houses or switching titles on existing stock to place bets on the price rising.

It felt worth litigating the disputes taking place during the zenith of the Keynesian system. In the 1950s and 1960s, there seemed to me a break between the ‘Treasury View’ — of ‘stop-go’, ‘hydraulic Keynesianism’, fine-tuning demand as delicately as possible, often in a negative direction, particularly in response to the negative trends in the balance of payments — which had by then become ‘orthodox’ Keynesianism, and those like Roy Harrod (the first biographer of Keynes before Skidelsky) who wanted more of the ‘confidence trick’ element of Keynesianism. Harrod and others thought that the economy should be consistently run very hot, even in the face of the external constraint, in order in to try and stimulate investment (and thus productive capacity) sufficiently to find a path through for exports. This was an idea that was embedded in NEDC, the Department for Economic Affairs, and the National Plan.

Skidelsky rejected the phrase ‘confidence trick’. ‘Confidence is a real thing. There has to be something behind confidence — you don’t know what the outcome of any particular investment is going to be, but the investing class as a whole needs an incentive to invest in the real economy. Many people lose and gain in that — as they do in any economic activity. But it was stop-go that was the manipulation of the political cycle, spending to get votes — which is not Keynesian.’ There was however, still the problem of the economy being run too hot: the primary problem in Keynes was the tendency to assume that politicians could be honest managers of the economy. Skidelsky noted that, even if stop-go looked terrible, ‘It shouldn’t be forgotten the average rate of growth was double since, and that even with the extraordinarily high rates of taxation. There were strong unions and moderate inflation.’

Of course, we had our doubts about the sustainability of a corporatist settlement and running the economy in this way. But we eventually found agreement in two crucial aspects of the conversation. The first, theoretical — that economics is not an end, but a means to diverging concepts of the good. And the second, subsequent question — the management of the political dimension of the economic sphere.

‘Keynes wrote a wonderful short essay in 1930 called “The Economic Possibilities for Our Grandchildren”. Activity should go on until there is enough, but it shouldn’t go on to the stimulation of junk buying and so on. What hasn’t happened, because we never pause to think, is ask what we want? Do we have enough for a good life? We can’t define what a good life is, and for the most part, in economics we say that’s simply what people “want”, and therefore we should give it to them, and that’s as far as it goes. He had a definite conception of an ethical end to economic activity, which was to enable people to live, as he called it, agreeably and well. At which point growth may no longer be important.’

Our more neoliberal readership is free to take a moment to roll their eyes. But the neoliberal approach is based, fundamentally, in a radically individualist concept of the good — one which is hardly self-evident or indeed based in any concept of public welfare, but oftentimes a much shakier utilitarianism that has no relation to the standard metrics of national policymaking. Doctrinaire liberals, even those of a more national persuasion, will reject this, but the firmest advocate of the Whig principle today is Nick Land — who is the first, but increasingly no longer the only one, to accept the possibility for an entirely anti-human direction to what non-sovereignty over market forces will mean. Capitalism — and the independent logic of commercial and technological development — is based chiefly in the satisfaction of our material appetites, rather than our rational deliberations. The unfolding of this process of ‘irrational’, non-agentic development, does and has always ruthlessly reshaped our selective environment and habitat as a biological organism. For most of our history, this has been in ways that have enabled the greater proliferation of ‘human life’, in raw numbers, but this is simultaneous to the phenomena of our individual capacity for our sovereignty over that process to diminish generationally. The question of our ‘flourishing’ may become more stark than ever.

This radical remaking of our environment no longer even serves our proliferation in number — an advanced economy organised by the independent logic of capital has a diminishing need for labour. In the last half-century, this was largely beneficial — but this is now a process that, if it remains ungoverned, selects against human quality. The answer to the problem of human flourishing in advanced societies has only been meaningfully grasped (with exceptions such as Adam Ferguson) at since the turn of the last century, by many, Keynes, the Fabians, and so on. But we have no satisfactory answer, which far from a vindication, should bring the contemporary neoliberal no comfort at all.

Skidelsky noted Keynes’ emphasis on the paradox of thrift — in which actions rational for the individual have repercussions that are dire for the society — as the basis of his ethical economics. ‘Keynes was not an extreme individualist, but an individualist, because liberals will always ascribe great importance to individual liberty. The role of the government was a protective one so that the individual was ultimately able to think about things other than simply making a living or existing as you might put it. This is going to be relevant when we ask the question of what the consequences are of accelerating technical progress through AI. Are we going to manage the process so it doesn’t destroy the possibility of a good life?’

We then discussed an idea we had called the ‘proletarianisation’ of the labour market (more recently expounded by Palantir’s Alex Karp); that is, the possibility, or likelihood, that mass AI rollout into the services economy will lead to a disproportionately large narrowing of white-collar and professional employment. Jobs in these sectors will exist, of course, but in a more managerial and human-facing capacity which makes the idea of equal numbers of jobs to replace administrative and technical losses unlikely. By virtue of the much slower rollout of robotics, we are very far off a ‘post-scarcity’ scenario, and will most likely see an even greater acceleration in the trend of the downwardly mobile graduate and professional. Solutions such as UBI are, for various reasons, very unlikely to produce ‘the good life’, or resolve the real distributional struggle that this process will unleash — over the question of dignity or, for lack of a better word, ‘status’. This would ultimately be an environment in which selection for intelligence, especially the kinds of intelligence that cluster in the middle — the soil from which genuine excellence or genius tends to spring — becomes far weaker.

‘It’s a very ominous phrase you use, “proletarianisation”. It immediately takes one back to class struggle — and the whole point of Keynes was to bypass the class struggle by the state being a manager of the economy in such a way that all of the parts can work together harmoniously. His primary shortcoming was his excessive attachment to ideas and having the right ideas, and this led him to ignore the factors of power. Because of this he avoided our distributional questions here, but to me the way to restore Keynesianism was to link it to distributional issues. Perhaps that will mean a link to the underconsumptionist critique of capitalism’.

Of course, I was sceptical that we live in an underconsumptionist moment — until fairly recently Britain had a fairly buoyant labour market, and our problems largely seemed to be more structural, on the ‘supply-side’. ‘Well, consumption is highly unequally divided. Some don’t have much, and others have a huge amount. People with lots of money, with savings in often speculative assets and not the real economy. If a majority or a very large segment of the population don’t have enough, you start having problems of demand, and speculation goes on. Now you might say, well there’s not much spare capacity in the economy, because until recently you only had 4% unemployment. But a great many people are working less than they would want to because they can’t get full-time jobs, or in jobs they would be more productive. It also doesn’t explain the huge increase in disability and economic inactivity, which we urgently need to get a handle on.’ Skidelsky is no doubt correct that the headline unemployment rate has become less meaningful as an economic indicator than it once was. ‘So there is spare capacity, and that’s exactly where you get a demand problem. Of course, that’s not the only source of inadequate demand. And if you are going to decant a lot of people from higher-paid professional jobs to proletarian ones, you’re actually reducing demand. How is demand going to be maintained if your processes are such that more and more labour is directed to minimum wage jobs?’

The essentially ‘workfarist’ thrust of his ideas was not lost. The state could look after demand and employment, which may prove salient as the monetarist/neo-Keynesian era and generous welfare states seems to be coming to a logical end. ‘I’m very attracted to the idea of guaranteed public sector jobs: if unemployment rises above a certain level, the state should step in as the employer of last resort. There are examples of this happening around the world, mostly on a small scale — except in Hungary. Their public sector job guarantee program is very interesting. Instead of having a reserve army of the unemployed on public purse, you have a reserve army of the employed, which grows or shrinks with the level of private economic activity. It would be a more sensitive automatic stabiliser in the economy. That’s one way, and another is more public investment. Total investment has collapsed, and the public share has been a big part of that. It’s now starting to pick up again, and Labour wants to do more, but is hobbled by the fiscal rules. The fiscal rules do stop the Keynesianism I’d like, which I’d call supply-side Keynesianism, with smart public investment, and to make sure that people stay in the market and their skills don’t disappear.’

Oswald Mosley — or ‘Maynard Keynes plus private armies’

Skidelsky had spent some time living with the Mosleys whilst writing the biography. At the time, his biography attracted controversy for his treatment of Oswald Mosley, which was not exclusively condemnatory. His portrayal of Mosley suggested he was a man driven mad by inaction and a failure to build the ‘home fit for heroes’ in the interwar period — an assessment which, of course, granted him some nobility. He was, for Skidelsky, a capable man who could well have been a Labour leader or even Prime Minister. Mosley’s tragic flaw was his characteristic impatience, if not emotional immaturity, which set the course of his life and led him ultimately to abandon Labour for what would become the British Union of Fascists.

‘What attracted me to writing his biography was that the subject of my PhD was the politics of the slump in Britain. It was published as Politicians and the Slump, and he was, of course, a very important actor in that. And he, like Keynes, was advocating public works to counter unemployment. He produced a scheme far ahead of its time for this. When he was in the government, it was turned down, and he resigned. So he was the first political Keynesian, yes, so that was how my sort of academic trajectory went — it was from politicians in the slump, to Mosley, and then to Keynes. Those are the two leading sort of actors who I thought were on the right side of this debate, because the orthodox view was, you cut wages, you balance the budget, and then everything will be all right. Well, of course, it wasn’t. They did that, and everything was still wrong. So Mosley was on the right side.’ Skidelsky’s psychological portrait was of Mosley as a man taken by everything new, who wished above all else to be at the centre of a great battle — one early chapter is titled ‘The Young Crusader’.

‘Now, why did he why did turn to fascism when his proposals were turned down? I think the temptation came too early, and he was too young to resist the temptation. Fascism was very much on the move and seemed to be to many people a wave of the future. Particularly because it was anti-communist, a bulwark against communism, as well. But what distinguished fascist politics from ordinary politics was the explanation of Mosley’s failure. There were other reasons for his failure. I mean, one of them was that the economy did start recovering soon afterwards, so the great crash that he kept predicting never happened. But just as important was the militaristic style of his politics, which was borrowed from continental fascism and seemed un-British. Yes, putting his followers into black shirts, for example, and the fact that he seemed to court violence at his meetings. Gradually, of course, he was drawn into anti-Semitism as well.

‘I may have been too kind to him on both of those things, but I should point out, if you go back, the reviews of my book were pretty favourable. For example, AJP Taylor said I had not deviated from the path of an impartial historian. I think I was more interested in defence than offence. I mean, most of the books have been completely condemnatory, and I was trying to restore the balance by suggesting that Mosley was an early Keynesian. And someone of considerable intellect and courage who went wrong.

‘I think there was a genuine thread running through Mosley’s life, which was hatred of war, I mean, and that was a reaction to the First World War. It’s sort of quite extraordinary how much it runs through; it made him an appeaser in the 1930s, together with other people who hated the idea of another war. But it also made him, in the post-war period, when he said he didn’t count for anything anymore, very much in favour of negotiating with the Russians and the Chinese. He once said to me some other mad ideas: “I want to go and see Mao, and I want to sort of discuss how we can coexist with each other.” It was a very genuine thread. I think his anti-Semitism was purely political. I think it was just exploiting anti-Jewish feeling in certain parts of the country, particularly in East London, where he could get support. Mosley denied this. It wasn’t that, it’s because Jews kept attacking my meetings, and the Jews were many, very prominent in the Communist Party, and so I had to fight back. He portrayed it as a purely defensive reaction. But I don’t wear that.’

The failure to build British meritocracy: indigenous fascism, coalitionism, class, and revolution.

There is a wider question about the failure of British fascism due to its foreign nature. I wanted to push back on the assessment that British fascism was merely a foreign import. Political violence was, decreasingly, but still taken as, a ‘part-and-parcel’ feature of political life. David Lloyd George had spoken out to defend Mosley after the Kensington Olympia controversy. Ideologically, British fascism synthesised a number of political trends that were native and emergent from about the 1880s onwards — the National Efficiency movement, interest in technocracy, the wider revolt against laissez-faire and free trade, a belief in a new ‘aristocracy of talent’ — or meritocracy — that would replace the old aristocratic society.

Notably, Britain never had a full-throated revolt of the bourgeoisie, and subsequently such ideas drew an organic support from a new professional middle class and black-coated proletarians who had once seen the Radical strain of liberalism as their vehicle. They were advocates of social reform, women’s suffrage, slum clearance, and adoption of German-style insurance and social protection — all of which intersected with belief in eugenics, with a pressing fear that industrial society was biologically deleterious. The electorally damaging, imported methods of violence — but ultimately military confrontation and defeat of fascism on the continent — played a role in the diminishing salience of these issues in British and wider European discourse, but it would be incorrect to view the fascism of this time as ‘fundamentally un-British’.

Skidelsky had a different view. ‘There’s a lot there. I think a simple way of talking about fascist ideas is that it was “Keynes plus Joseph Chamberlain plus private armies”. They were British and they had policies that yes, easily could have been advocated without the uniforms or castor oil treatment. You certainly don’t need the violence or fascism to get a decent economic policy. In fact, Mosley wrote to Keynes in 1933 — they knew each other — and said “congratulations on adopting fascist economics”. And Keynes wrote back and said, “I wrote what I did not to endorse you but to save the country from you.” That was Keynes’ argument in the end. Mosley, had he been thinking properly, would not have been tempted. He should have tried, at all costs, to stay in Parliament, and you know, advocate without this violent paraphernalia. As one of his sons once said to me, “My father was brilliant at everything, except politics.”’

I asked how well Skidelsky knew the Mosley family. ‘Well, of course, I went to see him when he was alive and wanted to get to understand him. He was certainly very charming, very polite... He had this sort of habit which many of them developed, like Mussolini, of suddenly widening their eyes like this [maniacally widened his eyes] and then closing them again. So they were his platform eyes, which he’d turn on people. He was still very much engaged, but he was performing still. He became very pro-European… And I quizzed him on all of these things in the biography; I allowed him to make some dissenting footnotes here and there. In the end, I said, maybe it’s right — maybe biographers shouldn’t get to know his subject too well, because he can be charmed and fooled by them. But I don’t think I was overwhelmed, and I kept my distance. As you say, the book is now considered pretty standard.

‘Now, the controversy came a bit later, and it was from Oxford where a group of people circulated stuff saying I was far too favourable to Mosley, and I failed to get a couple of positions there. But I haven’t seen much evidence by people who have actually written about the subject. I don’t think they attacked me particularly.’ Skidelsky was also voted down for tenure at Johns Hopkins — but was eventually taken in by the University of Warwick. ‘Warwick really supported my whole Keynes project and gave me adequate leave to do it. I was regarded as a bit of a star at Warwick because of this work, and no one ever talked about Mosley. Eventually, I joined their economics department.’

Another point of interest was in the coalitionist tendency which was imagined as a response to the scleroticism of British politics at the time. Mosley, throughout his career, as a Unionist MP, in Labour, the New Party, and ultimately the BUF, attempted to bring ‘men of push-and-go’ from across the political aisle into his faction. Harold Macmillan and other young Tories had joined the (very Keynesian) New Party. Dynamism and coalitionism became associated by the titanic figure of Lloyd George, and were similarly grasped at through the efforts of Webb’s Coefficients dining club.

‘There was a successful attempt at a coalition, of course, but it was the National Government. So that destroyed one bit of Mosley’s coalition-building, but you’re right. There wasn’t an obvious place for him and his ideas in the existing party system. He should have done what Nigel Farage has done, stayed within the system and started another party. I mean, the New Party genuinely could have been the nucleus of it. It didn’t have to go fascist. One of the things that influenced people, you mentioned, Mosley, Harold Macmillan and others, was hatred of what they call the “old gang”. Yes, I mean the “old gang” which had led Britain into the First World War. They then failed to create the land fit for heroes that they promised. They were a disaster, and therefore, you had to have something new, something to fulfil the promises made to all those soldiers returning from the war, and they didn’t do it. The “old gang” didn’t do it. That hatred of the “old gang” is a particular product of the First World War.’

The future

Is there a ‘neo-fascism’ today? ‘Some of the Populists certainly, yes. “Neo” is correct. They’re not fascist because they haven’t — as yet — militarised themselves, and they stay within the electoral system, and that’s where they hope they have their mass rallies and so on. But they don’t try and win power outside the system, and that’s a big difference, and that’s where Mosley — I think — failed as a political leader. He made bets that didn’t come off, and in the end, he was arraigned as a traitor because he was too close to Nazism.’

‘We’re surely going to have another financial crash because there are these bubbles. And we can only see how severe it will be, what the political repercussions will be, what the economic response will be. I have a feeling that we are, as a nation, well past our zenith, and the quality of political leadership is very bad now, but that may be just the grumblings of an old fogey.

‘I think the Austrians were crazy. Their theory of the Depression was caused by money being kept too cheap, and therefore setting in inflationary “malinvestment”, ignoring that a certain level of inflation keeps investment going. The malinvestment boom, they said, had to collapse and wanted to use the opportunity to squeeze the rottenness out of the economy. They seem to be oblivious to the political consequences of trying to do that.

‘The completely different Keynesian interpretation is that the depression was caused by the creation of dear money. The ultimate weakness in Austrian analysis and remedy is that it ignores the political consequences of what they’re doing. Keynes said of Hayek: “I’m in favour of your liberal views, I am a liberal myself. But your policy is more dangerous for liberalism than mine.” He never wrote a proper rejoinder to The Road to Serfdom — which would have been a wonderful debate between the two. They were both in the business of preserving liberalism by completely different means, as Keynes had said also to Mosley. Keynesianism was the success story in the last century because it kept the liberal system going for twenty-five years after the War when people were freely predicting that Europe would go Communist. He gave it weapons to fight back with. So he’s a great man. It’s absolutely wonderful what he achieved.

‘The first weapon that liberalism lacked was the ability to manage demand: you need sufficient demand in the economy for business to prosper. The second was his organic theory of society, that it isn’t composed of independent bits but works as a whole. If one bit works wrong, it affects everyone else. The third is that economics is not an end in itself, but a means to ends. And the fourth, which underlies it all is a belief in prudence as a supreme virtue of statesmanship. In private life, people can be very imprudent, and they are — he was a member of the Bloomsbury group; he was bisexual, maybe more homosexual than bisexual, and they were all quite iconoclastic. But when it comes to government, you must be very prudent in committing your nation to what you’re doing. That made him very resistant to war, somewhat differently from the Mosley reaction.

‘Keynes hadn’t fought — he was in the Treasury. It made him resistant in a very different way, to both war and revolution. He said, “Look, there’s got to a be a middle way. The middle way was a prudent way. You get together the important forces — they all have stake — and you try to reconcile them without beating each other up.”’

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This article was written by Francis Gaultier, Commissioning Editor. The staff of Pimlico Journal are saddened by Lord Skidelsky’s passing.

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