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Sunday, 6 May 2012

Hope Without Expectation

I am legitimately criticised for the perceived circularity and negativism of this blog-series. I have laboured the point that the United Kingdom is far beyond the failure of Politics, sunk apparently-inextricably in the cycle of economic decline that has been brought upon the country by generations of deluded politicians. Most citizens would agree that the country has experienced the decline in morale that has for millennia been attributed to failed states. This week's elections have shown that politicians and commentators still vigorously play their games, seeking office because being in office office still brings patronage in greater measure than it brings odium. While conscious of the country's economic weakness, and thus its limited capacity to support a strong defence capability, politicians from all the parties that share the benefits and responsibilities of Privy Council membership have continued to maintain armed forces in support of pointless American adventurism in Afghanistan even while they have further stripped the country of the means by which its essential interests may be safeguarded.

What are those essential interests? The answer was clear in the context of Elizabeth Tudor's definitive separation of the English church and state from the European polity that had survived through the  'middle ages' in the Holy Roman Empire and the Papacy, to which her sister Mary I had abjectly subscribed. It vindicated the imperial expansion that began under Cromwell, survived the American War of Independence and climaxed in the Coronation Durbar of George V in Delhi. It was explicit in propaganda during the dogged campaign against revolutionary France and Napoleon's pseudo-Roman Empire. It was brilliantly articulated during the noble, desperate struggle against Nazism. Then is was immediately forgotten, as the chattering classes built the legend of an 'exhausted' Britain that could no longer hold its place in the world.

The central proposition about those interests is that a State must have its own independent accountability for its Economy, in order that its people can prosper: the justification for a Polity, a constitutional settlement. Such a state enables the basic Laws of Political Economy to operate with apparent spontaneity. The appearance of spontaneity was consensually abrogated in wartime [and especially in the 'total war' that was waged in 1805-14 and in 1939-45]  when the state micro-managed the distribution of incomes and of rations so that the government could be believed when it asserted more elegantly the concept "we are all in this together" that is also the Leitmotif of the current coalition.

The Laws of Political Economy that were recognised and enforced in 1558 under Elizabeth I, by the Regency in the early nineteenth century and by the Liberal government of 1912 began with the Iron Law of Wages - the simple truth that a country can only be strong if the wealth it generates is at least equal to the annual consumption by the government and people. In years of crisis personal consumption must be deferred so that the state can use as much of the national product [and of the nation's credit] as it needs. If in time of war aliens are willing to lend goods and gold to assist the campaign, the nation must accept that post-war consumption must be deferred until the debt is settled. This simple truth that drove the austerity that prevailed in the Second World War and in the postwar period until the middle nineteen fifties. Then, quite suddenly, this principle was abandoned. Since then bowdlerised Keynesianism has underpinned political delusion and consequently the inevitable economic decline have prevailed.

Between 1958 and 2008 the state's wilful flouting of the Iron Law reinforced the adverse operation of the second Law of Political Economy, the Law of Diminishing Returns, which stipulates that unless an economy makes constant new investment in new technology, at a sufficient pace, the intensified use of the obsolescent technology progressively produces less output for each input of energy and materials and human labour that is put into that production. Eventually costs outstrip benefits and living standards must decline. This has happened in Britain and in most eurozone countries.The money supply was inflated massively to accommodate borrowing  by firms and by families - and by the government - that funded imports from economies with higher productivity than the UK and made the consequences of the breach of the fundamental economic laws even worse. The consequences  of that blatant folly surround us now.

In the next few days I will present the basis for a new polity: there is no quick and comprehensive solution to Britain's dilemma, but there is a comprehensive solution that can be begun quickly and which would produce spectacular beneficial results. It requires political as well as economic transformation. Most of the twerps who are prominent in government and on the opposition front bench can not be expected to take the point; but there is ample talent even now in the House of Commons to make a start.

Britain matters to me because I am British. Britain matters to the world because our small country gave the whole world modern industry, modern commerce and the basis of commercial law. The spectacular decline from Workshop of the World to basket-case - whose abject state is not yet recognised universally - is also an important negative exemplar for other states. If the united Kingdom can drag itself from the slough of despond into which it has sunk, it can once again be the great leader of economic and social progress.

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