fredag 31 januari 2020
Satisfaction after 47 years
I was furious for two reasons when Britain joined the the European Economic Community in 1973.
The first was the return of the Corn Laws, 127 years after they had been repealed in 1846, after many decades of hard campaigning by people like David Ricardo and William Cobbett, a campaign punctuated by events such as the Peterloo Massacre and the Swing Riots. The result was that cheap food from Commonwealth countries and a few other traditional suppliers was locked out of the the country, leading to a chain of events including a round of strikes for more pay to keep up with the higher cost of living, the Three Day Week, the Winter of Discontent, the election of Margaret Thatcher and the Falklands War; the latter would obviously not have happened as long as Britain was one of Argentina’s biggest customers.
The second was the replacement of Purchase Tax, a bad tax but we could live with it, by the infinitely worse EuroTax, VAT, which fails all four of Smith’s Canons of Taxation – a considerable achievement, but it was invented by a German who was obviously unfamiliar with Smith. It was sold on the myth that it is neutral and non-distorting, which is like saying that putting sand in your car’s lubrication system will not damage any particular component more than any other. A more harmful and inefficient tax would be difficult to devise.
The difficulty now is that the EU mantra that “our farmers” need protection is embedded and will be difficult to shift, while for decades, Tory governments have pushed up the rates of VAT so as to reduce the headline rates of income tax, which looks good in election manifestos, and the public is fooled. So undoing the damage will not be so easy and take more than just Brexit.
It is a myth that the EU led to a renewal of prosperity in Britain. The prosperity never extended far beyond the motorway corridors a couple of hours drive away from London. The EU regional development grants led to little or now trickle-down. Personally, the EU gave me an opportunity to go and live in another country at a time when Britain was going through a bad phase in the middle of the 2000s, but the problems – primarily due to the decisions resulting from long-term misgovernment – have caught up and overtaken me in the country to which I have moved. Hopefully, change will come here after Brexit as the forces that lead to these political shifts are not confined within national borders.
The EU has evolved from what is sometimes described as a “noble concept” into a sprawling monster with a remarkable ability to mess up, consistently, almost every policy area it gets involved in. Britain is well out of this failing enterprise.
The first was the return of the Corn Laws, 127 years after they had been repealed in 1846, after many decades of hard campaigning by people like David Ricardo and William Cobbett, a campaign punctuated by events such as the Peterloo Massacre and the Swing Riots. The result was that cheap food from Commonwealth countries and a few other traditional suppliers was locked out of the the country, leading to a chain of events including a round of strikes for more pay to keep up with the higher cost of living, the Three Day Week, the Winter of Discontent, the election of Margaret Thatcher and the Falklands War; the latter would obviously not have happened as long as Britain was one of Argentina’s biggest customers.
The second was the replacement of Purchase Tax, a bad tax but we could live with it, by the infinitely worse EuroTax, VAT, which fails all four of Smith’s Canons of Taxation – a considerable achievement, but it was invented by a German who was obviously unfamiliar with Smith. It was sold on the myth that it is neutral and non-distorting, which is like saying that putting sand in your car’s lubrication system will not damage any particular component more than any other. A more harmful and inefficient tax would be difficult to devise.
The difficulty now is that the EU mantra that “our farmers” need protection is embedded and will be difficult to shift, while for decades, Tory governments have pushed up the rates of VAT so as to reduce the headline rates of income tax, which looks good in election manifestos, and the public is fooled. So undoing the damage will not be so easy and take more than just Brexit.
It is a myth that the EU led to a renewal of prosperity in Britain. The prosperity never extended far beyond the motorway corridors a couple of hours drive away from London. The EU regional development grants led to little or now trickle-down. Personally, the EU gave me an opportunity to go and live in another country at a time when Britain was going through a bad phase in the middle of the 2000s, but the problems – primarily due to the decisions resulting from long-term misgovernment – have caught up and overtaken me in the country to which I have moved. Hopefully, change will come here after Brexit as the forces that lead to these political shifts are not confined within national borders.
The EU has evolved from what is sometimes described as a “noble concept” into a sprawling monster with a remarkable ability to mess up, consistently, almost every policy area it gets involved in. Britain is well out of this failing enterprise.
onsdag 29 januari 2020
Deathly grip of Post-Modernist solipsism
REMAINER DERANGEMENT SYNDROME
Brexit has destroyed old friendships, or perhaps friendships that were never as well grounded as I thought. Here is a recent email exchange. It began when I sent this link to a Guardian article about the mysterious increase in explosions in Sweden.
ME: Here is how the Guardian reports a recent phenomenon in Sweden. It shows how the Guardian will write nothing that spoils its narrative. Who are these bombers? Where have they come from? Why Malmö (though we have had them here, too). Why are these a recent phenomenon?
The Guardian is utterly untrustworthy and the editors are a disgrace to their predecessors.
RESPONSE: The Guardian is one of the few newspapers with truly investigative journalism despite what you might think.
The whole BREXIT saga is the real utter disgrace, leaving this country deeply, deeply divided for generations to come … you played your part in this - extremely disappointing … thinking this is over now … think again, this is definitely NOT over and not forgotten.
When the UK joined the EU, within weeks, food prices almost doubled as inexpensive food from Australia, New Zealand, Canada and Argentina vanished from the shops. I remember it well. The increased cost of living was the cause of the continual industrial unrest in the 1970s, which led to the election of Thatcher in 1979. The fish off the Sussex coast were mostly hoovered up. Then we got the food mountains, subsidised prairie farming, and then set aside, followed by payments to landowners, which include the wealthiest people in the land. What also came to light after 2016 was the democratic deficit. The elected parliament has no power to initiate legislation. That is the preserve of the commission. A place on the commission was a way of getting rotten politicians like Mandelson quietly out of the way. There is also the issue that the English legal system based on Common Law and habeas corpus is fundamentally incompatible with continental systems based on Roman Law.
My own preference would have been for a radically reformed EU. Unfortunately, they have no incentive to reform.The next thing that will happen will be that the incipient German banking crisis will blow. As you know, they are full of debt from southern Europe which will never be repaid.
The Guardian has never talked about any of these things. Goodness knows why. I am astonished that progressive people supported remain. I can only assume that they were not aware of the economic implications of the EU's policies. The EU has followed a Rake's Progress of economic mismanagement, largely due to the following of what are seventeenth century economic policies, based on a long discredited view of economics known as 'Mercantilism'. Since I am, having studied these issues for the past fifty years, how can I be expected to support such folly, which were no part of the essential EU project? But you will not read about that in the Guardian.
Here in Sweden, public services are now, if anything, even worse than those in the UK. The money pledged to support the million people who have been welcomed into the country over the past ten years has run out. Now we have swinging cuts, and a demand for a huge increase in contributions to the EU to make up for that paid by the UK. It is not fair. We are now a poor country.
The EU is by no means perfect, but is worth defending! I totally and utterly disagree with your very odd assumptions.
The CAP gives us high food prices, bolsters the rental value of agricultural land and keeps sub-marginal land in farming use. Taking from the poor and giving to the rich.
As I said, I have been studying this subject, under good guidance with plenty of opportunity to discuss the issues all round, for nearly fifty years. I know more about it than people like Hutton, Rawnsley and Toynbee. Actually, the Guardian's economics editor, Larry Elliott, is broadly in agreement which what I have said, but gets brickbats when he makes the points.
When the history comes to be written, there will be a lot of head scratching about how so many people allowed themselves to be deceived.
I would agree that the EU is worth defending, but the people who have taken over control have wrecked it. The EU was founded on the principle of subsidiarity, but that principle was promptly ignored.
I do not share your views and btw nor Larry Elliot’s.
How about countering the points I made? I expect an adult response.
The next event will be a German bank crisis. German industry has been kept busy supplying goods to people who have had to be lent money to pay for their purchases. The debt is unrepayable. This was never a sustainable business model. If Germany had kept the DM, its value would have risen and the persistent balance of payments surplus would have been checked. As it is, the debt has grown and grown, and Germans are effectively working at least half a day a week for nothing. The economist Nigel Calder long ago warned forty years ago of the dangers of a single currency. What will the ECB crisis do for the EU? As I say, the EU politicians and policy makers are the ones who have done the damage, not the people who have criticised their folly. Don't shoot the messenger.
ME AGAIN: Does the term “self-constructed narrative“ come from Derrida or Adorno?
The postmodern analysis is ultimately solipsistic, because it denies the existence of objective reality. It is the high road to collective madness. It is also an effective tool to shut down rational discussion. The Guardian has been constructing narratives for the past decade or so. It is widespread in the Swedish media and among Swedish politicians. Thus we can be told that explosions and other crimes “happen”, without further information being provided about who was responsible and what might be the motives and causes, since the answers to those questions would destroy the narrative. There is nothing new about the technique, except that it used to be described as dishonest propaganda, or being ‘economical with the truth’, the phrase famously used by a Cabinet Secretary under questioning.
I was taught to use the Socratic method: the use of reason to support or refute propositions and assertions. It seems to have gone out of fashion. That will end badly.
Brexit has destroyed old friendships, or perhaps friendships that were never as well grounded as I thought. Here is a recent email exchange. It began when I sent this link to a Guardian article about the mysterious increase in explosions in Sweden.
* * * * *
The Guardian is utterly untrustworthy and the editors are a disgrace to their predecessors.
* * * * *
The whole BREXIT saga is the real utter disgrace, leaving this country deeply, deeply divided for generations to come … you played your part in this - extremely disappointing … thinking this is over now … think again, this is definitely NOT over and not forgotten.
* * * * *
ME: Since 2016, I have learned a lot about the EU which I did not know. It seems that the policies are dominated by the Franco-German military/industrial complex: Schneider-Creuset, Alstom, Krupp-Thyssen, Siemens, Mercedes Benz, Bayer, BASF, and the corporate and private holders of large agricultural land holdings. These are very same as payrolled the fascists and Nazis between the wars. It suits big business to have a pool of cheap labour from the former communist countries. EU money sent to those countries is pocketed by corrupt politicians. The Euro is at least 10% cheaper than a German currency would be, which means that Germans are working at least half a day a week for nothing. It is exploitation big time. VAT, a requirement of being in the EU, is one of the most inefficient, regressive and damaging taxes it is possible to have.
When the UK joined the EU, within weeks, food prices almost doubled as inexpensive food from Australia, New Zealand, Canada and Argentina vanished from the shops. I remember it well. The increased cost of living was the cause of the continual industrial unrest in the 1970s, which led to the election of Thatcher in 1979. The fish off the Sussex coast were mostly hoovered up. Then we got the food mountains, subsidised prairie farming, and then set aside, followed by payments to landowners, which include the wealthiest people in the land. What also came to light after 2016 was the democratic deficit. The elected parliament has no power to initiate legislation. That is the preserve of the commission. A place on the commission was a way of getting rotten politicians like Mandelson quietly out of the way. There is also the issue that the English legal system based on Common Law and habeas corpus is fundamentally incompatible with continental systems based on Roman Law.
My own preference would have been for a radically reformed EU. Unfortunately, they have no incentive to reform.The next thing that will happen will be that the incipient German banking crisis will blow. As you know, they are full of debt from southern Europe which will never be repaid.
The Guardian has never talked about any of these things. Goodness knows why. I am astonished that progressive people supported remain. I can only assume that they were not aware of the economic implications of the EU's policies. The EU has followed a Rake's Progress of economic mismanagement, largely due to the following of what are seventeenth century economic policies, based on a long discredited view of economics known as 'Mercantilism'. Since I am, having studied these issues for the past fifty years, how can I be expected to support such folly, which were no part of the essential EU project? But you will not read about that in the Guardian.
Here in Sweden, public services are now, if anything, even worse than those in the UK. The money pledged to support the million people who have been welcomed into the country over the past ten years has run out. Now we have swinging cuts, and a demand for a huge increase in contributions to the EU to make up for that paid by the UK. It is not fair. We are now a poor country.
* * * * *
RESPONSE: Oh dear, a lot of sweeping statements based on assumptions, which are “half-cooked” ... evidence please.
The EU is by no means perfect, but is worth defending! I totally and utterly disagree with your very odd assumptions.
* * * * *
ME (evidence supplied) Which assumptions are odd and what is odd about them? There would not be 30,000 expensive lobbyists in Brussels if their efforts were fruitless. The EU’s trade and economic policies favour EU Big Business: a low paid labour force is available and skinflint employers exploit the situation. The Euro favours German big business and gave them low labour costs and an easy market to sell into, even if the banks had to lend the money to the Greeks and the Greeks couldn’t pay it back.
The CAP gives us high food prices, bolsters the rental value of agricultural land and keeps sub-marginal land in farming use. Taking from the poor and giving to the rich.
As I said, I have been studying this subject, under good guidance with plenty of opportunity to discuss the issues all round, for nearly fifty years. I know more about it than people like Hutton, Rawnsley and Toynbee. Actually, the Guardian's economics editor, Larry Elliott, is broadly in agreement which what I have said, but gets brickbats when he makes the points.
When the history comes to be written, there will be a lot of head scratching about how so many people allowed themselves to be deceived.
I would agree that the EU is worth defending, but the people who have taken over control have wrecked it. The EU was founded on the principle of subsidiarity, but that principle was promptly ignored.
* * * * *
RESPONSE: Don’t pretend you “would agree that the EU is worth defending”. You evidently do not want to miss a chance to undermine it - your self constructed narrative is a a jumbled mix of out of context arguments. ‘Classic’ for your age group and symptomatic for the deep divide in this country for generations to come. Ce la vie!
I do not share your views and btw nor Larry Elliot’s.
* * * * *
ME: The EU leaders undermined the EU with trade and economic policies which fly in the face of three hundred years of accumulated knowledge and wisdom. As an intelligent and well informed citizen, I expect better from you than to dismiss my points as “a self constructed narrative” and “jumbled mix of out of context arguments.” “‘Classic’ for your age group and symptomatic for the deep divide in this country for generations to come.” It is like a child putting its hands over its ears and saying ‘Shut up, I don't want to hear”.How about countering the points I made? I expect an adult response.
The next event will be a German bank crisis. German industry has been kept busy supplying goods to people who have had to be lent money to pay for their purchases. The debt is unrepayable. This was never a sustainable business model. If Germany had kept the DM, its value would have risen and the persistent balance of payments surplus would have been checked. As it is, the debt has grown and grown, and Germans are effectively working at least half a day a week for nothing. The economist Nigel Calder long ago warned forty years ago of the dangers of a single currency. What will the ECB crisis do for the EU? As I say, the EU politicians and policy makers are the ones who have done the damage, not the people who have criticised their folly. Don't shoot the messenger.
ME AGAIN: Does the term “self-constructed narrative“ come from Derrida or Adorno?
The postmodern analysis is ultimately solipsistic, because it denies the existence of objective reality. It is the high road to collective madness. It is also an effective tool to shut down rational discussion. The Guardian has been constructing narratives for the past decade or so. It is widespread in the Swedish media and among Swedish politicians. Thus we can be told that explosions and other crimes “happen”, without further information being provided about who was responsible and what might be the motives and causes, since the answers to those questions would destroy the narrative. There is nothing new about the technique, except that it used to be described as dishonest propaganda, or being ‘economical with the truth’, the phrase famously used by a Cabinet Secretary under questioning.
I was taught to use the Socratic method: the use of reason to support or refute propositions and assertions. It seems to have gone out of fashion. That will end badly.
Horrible Brexit 50p piece
It is depressing that no-one has criticised the design of the coin itself. The typeface looks like, though it probably is not, Zapf Chancery, one that comes with every computer. The seven-sided UK 50p coins are an ugly lump of metal; in fact the entire UK coin set lacks coherence, unlike the Euro set. When coins are worth more than their face value if struck in copper, it is time to withdraw that denomination. The best of the UK coins is the finely proportioned £2 piece, which makes it better suited as a commemorative, and also allows an inscription round the rim. A appropriate choice would have been a revival of the long-lost and charming Britannia design used on the 1860 bun penny, ruling the waves with a ship and lighthouse in the background. There has been a sad failure of imagination or knowledge of history.
Surely the Royal Mint could have done better?
fredag 24 januari 2020
Project Fear changes direction
With Brexit almost out of the way, the focus has shifted to the war on carbon dioxide. I have covered this in previous blogs here and here. Even the term “Greenhouse effect” is misleading and creates a false picture in people’s minds. IF the climate is changing, and IF it is due to human activity, the cause is almost certainly something other than an increase in carbon dioxide levels. That is the devil in the hysteria. It could be making everyone aim at the wrong target.
söndag 19 januari 2020
Time to get “Wealth of Nations” off the shelf
As the outlines of the Brexit settlement emerge, it is important to study Adam Smith and break out of mercantilist habits of thought; to keep the focus on IMPORTS as well as EXPORTS. A balance of payments surplus means that there is a net flow of real wealth out of the country. The surplus is other countries’ paper. The EU negotiators are behaving stupidly, in particular, because they ignore the effect that treating the UK as a third country will have on IMPORTS to the EU. Ireland in particular, will be badly hit because the UK is a major source of so many goods. After Brexit, the Irish will suffer as they will either have to pay the EU tariffs or the extra transport costs of bringing goods from continental Europe instead. They will be hit with a price hike. In other EU countries, there will be specific problems as UK products become more expensive and difficult to obtain – for example, Swedish microbreweries like to use UK malted barley.
The best thing that the UK government could do is to announce that it is committed in principle to allowing unrestricted importation of goods from everywhere in the world (including the EU), without waiting for the governments of other countries to reciprocate. I was going to say ‘reciprocate the favour’, but reciprocation is doing their own consumers and manufacturers the favour; they are the ones who want or need UK products – they do not buy them as an act of charity. The only politicians who seem to have been aware of this and understand why are some in the European Research Group. If the principles they advocate are not followed, the UK will not get the most out of Brexit. There are people outside the UK who want to see Brexit succeed and set the example to other countries of the benefits that will come from a return to the British free trade tradition. Waiting for reciprocation is not part of that. If the other countries’ governments do not reciprocate, it’s their own funeral.
lördag 18 januari 2020
UK to abandon EU standards shock horror
I got this from a former neighbour who for ten years has worked for the European Food Safety Authority – a tax-free appointment
In the news: “Today’s Politico Morning Agri & Food covers the post-Brexit farming plan that the UK government presented yesterday. According to plans, UK will no longer be part of the European Food Safety Authority, which regulates the active substances that make pesticides work using the so-called precautionary principle, which obliges policymakers to err on the side of caution when the potential hazards are serious, even if the supporting evidence is incomplete or speculative. Pesticides regulation will be taken over by the U.K.’s Health and Safety Executive; UK Prime Minister Boris Johnson also trumpeted a ‘liberation’ from EU rules holding back the use of genetically modified crops.”
It seems that some people are blinded by the EU faith. My reply was “Job opportunities for you. Keep an eye on the appointments adverts. Where will they be based?”
The EFSA still has not banned glyphosate, and are unlikely to, seeing that Monsanto has been taken over by Bayer, the German company which was part of the giant IG Farben industrial and pharmaceutical chemicals group. It employed slave labour at Auschwitz during the war, conducted horrible and often fatal medical experiments on concentration camp inmates, and has always refused to pay compensation to its victims. The EFSA still permits a load of E-number substances which are known to be harmful. They are so widespread that it is hard to avoid some of them, including sodium and potassium nitrate and nitrite, and some colouring – which are banned in the USA. The EU's blanket ban against GM is ludicrous. People have been eating GM crops for 8,000 years. Whether a GM is good or bad depends on the GM. If it enables farmers to drench their crops in poisonous chemicals, then of course it is bad. If it results in improved flavours, or removes a natural poison from a plant, then GM is an excellent thing.
tisdag 7 januari 2020
Mercantilist futility
The European currency board is currently squabbling. It has a set inflation rate target, the idea being that inflation will help to reinvigorate the sluggish economy of the Eurozone. With a rise in inflation due to higher energy prices, the target is on the way to being reached, though it is not clear how higher energy prices will stimulate the economy.
Underneath all this is a set of trade and economic policies which should, in the twentieth century, never have seen the light of day. German banks have had to lend to other Eurozone countries in order to maintain demand for German products, but they now hold vast amounts of urepayable debt.
Germany has the supposed advantage of a currency that is undervalued (for them) by at least 10%, possibly more. In reality, of course, it is a disadvantage. It means that Germans are working at least half a day a week for nothing. German workers are, literally, being short changed. What will happen when they notice?
How has this situation arisen? EU and Chinese economic policy is based on the conception of trade and economics known as “mercantilism”, which held sway in the seventeenth century. The underlying principle is that the aim of economic policy should be to bring money into the country, for example, by importing gold and silver, as the Spanish and Portuguese did. It was ultimately their downfall. They had devoted vast resources to shipping precious metals across the Atlantic. But this proved to be a futile effort; gold cannot be eaten, or used to for shelter, or fuel, or worn to keep out the cold. All that happened was that prices rose. Nowadays, mercantilist policy concentrates on exporting as much as possible and thereby maintaining a persistent balance of payments surplus. In its modern incarnation, it has left the German banks full of worthless paper.
Mercantilist theory had been refuted several times over before the eighteenth century was over but it survives in a zombie-like after-life in the minds of those responsible for making economic decisions at the highest levels.
Underneath all this is a set of trade and economic policies which should, in the twentieth century, never have seen the light of day. German banks have had to lend to other Eurozone countries in order to maintain demand for German products, but they now hold vast amounts of urepayable debt.
Germany has the supposed advantage of a currency that is undervalued (for them) by at least 10%, possibly more. In reality, of course, it is a disadvantage. It means that Germans are working at least half a day a week for nothing. German workers are, literally, being short changed. What will happen when they notice?
How has this situation arisen? EU and Chinese economic policy is based on the conception of trade and economics known as “mercantilism”, which held sway in the seventeenth century. The underlying principle is that the aim of economic policy should be to bring money into the country, for example, by importing gold and silver, as the Spanish and Portuguese did. It was ultimately their downfall. They had devoted vast resources to shipping precious metals across the Atlantic. But this proved to be a futile effort; gold cannot be eaten, or used to for shelter, or fuel, or worn to keep out the cold. All that happened was that prices rose. Nowadays, mercantilist policy concentrates on exporting as much as possible and thereby maintaining a persistent balance of payments surplus. In its modern incarnation, it has left the German banks full of worthless paper.
Mercantilist theory had been refuted several times over before the eighteenth century was over but it survives in a zombie-like after-life in the minds of those responsible for making economic decisions at the highest levels.
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