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Friday, 17 November 2017

Derivatives: The Looming Disaster

As if the total failure of government in the face of Brexit was not enough of a problem for the British state all on its own, the potential catastrophe in the area of Financial Derivatives can make all other considerations trivial.

It is very hard for me - who has been a horrified observer of the development of this market through the thirty-or-so years when it has been in existence - to get my head round what is involved when derivatives meet Brexit. Most people have never had the time to understand this type of 'product', and have never felt the need to do so. Yet as far as the international financial community is concerned derivatives are by far the largest set of 'assets' that they trade in. The bankers have induced their customers, taking in all other financial traders and pretty well every firm that does real-world business, to take part in derivative business as part of the process by which unknowns and unforseeables can be wished away from the the business scenario.

As the financial world has plunged headlong into cyberspace, the possibility of counterfactual events unsettling the market has increased. In response, very clever people have developed ever-more 'advanced' derivatives. Back in the Thatcher era, when the concept was now, most derivatives were derived from real-world events; such as the incidence of severe thunderstorms in the American midwest. Insurers found that the damage that such storms could do to crops was severe; but it was highly specific to very small areas where the storm might well destroy the crop in one large field but leave the surrounding area unaffected. Meteorologists set up businesses, equipped with satellite observation and reasonably sophisticated computer programmes, that could certify whether a storm was likely to have hit a particular farm at a given map reference on a given date: this enabled an insurer of the crop to make a snap judgement, whether to accept the claim at once, or whether to investigate whether it was genuine.

This enabled a secondary business to be established, whereby the information derived about the probability of of an event [such as storm damage] occurring could be tidied-up and used as the basis of a bet on the probability of storms causing damage. Such contracts enabled insurers, and bankers who lent money to farmers, to hedge against the actual occurrence of damage. Most areas do not have storm damage in any period, so a derivative based on the probability of a storm occurring leads to no payout: but if a storm does occur, the insurer can claim against the contract and thus meet at least some of the costs of real storm damage.

Once real-event related derivatives were deemed to be viable, there was an explosive expansion of derivative contracts. The probability of an asteroid striking New York is pretty low: but a derivative can be envisaged to cover it, and offered to firms that may be anxious about concentrating their property investment in that city; and why not earthquake damage as well? Such contracts could support insurers' capital; but they soon became a means of dealing with any possibility for loss both in the real world and in the fantasy world that the derivative creators were  erecting in cyberspace. Nowadays, any improbable 'risk' can be subject of a derivative and companies are [effectively] required by their financial advisers to place their bets on the subject matter of the derivative that they want to sell.

This huge trade in bets based on synthetic probabilities is focused on the great financial centres in New York and London. The world, led by the other countries in the European Union has bought and sold derivative contracts that are legally based in the UK: and now some clever observers have pointed out that all London contracts - ever since the market was invented - have been governed by the law of England within the overall regulatory system of the EU. Some commentators have suggested that all these contracts would become void when the UK leaves the EU at midnight on 31 March 2019: unless they can all be re-written - which is an impossible task. The ministers in Mrs May's government do not even seem to be able to understand the need to keep lorries crossing the channel taking components to and from factories in the UK and on the continent: so how can they be expected even to listen to the apparently-esoteric arguments that will be put to them with increasing urgency about derivatives [and other 'products' like options]?

This country is hurtling towards a disaster that will make the 2007-9 'crash' seem nothing. The calamity will occur in markets that the ministers probably don't want to understand: but those ministers will bear responsibility for the biggest-ever financial crisis if they continue on their present course. The headbanging Brexiteers are driving us all towards ruin: and if they succeed, they will plead innocence.

Ignorance and stupidity are no defence, in law or in the court of public opinion.

Thursday, 16 November 2017

Fiddling the Books

When Railtrack - notionally, a privatised company - was declared bust, its assets [railway lines, signalling systems, many stations, masses of land etc] were seized and a new government agency called Network Rail carried on as Railtrack had done. Under the daft scheme of privatisation that was undertaken by the Major government, the infrastructure was [mostly] put under Railtrack/Network Rail while the train operating companies competed for franchises to run the trains on the Railtrack infrastructure.

In a crazier development, the government began to subsidise Railtrack [and continued with Network Rail] by giving them money to make improvements, and allowing them to borrow money for track maintenance, updating signals systems, making level crossings safer etc. They also began to subsidise some of the franchised train operating companies as well. These companies could run on a relatively slender capital investment, as the majority of the rolling-stock on the railways had been privatised separately to leasing companies that leased the trains to the operators. The leasing business was quite exclusive and was generally profitable; but where there was doubt as to whether the mass purchase of updated trains would be affordable to the leasing company or the operators, the government opened the taxpayers' assets yet again to pay for the new trains.

The net result is that the people [as a whole] are paying more, per capita, in real terms than they did under British Rail; for a service that is in some cases inferior to British Rail when it was strapped for cash.

A few years after the Railtrack debacle was ended - by the creation of Network Rail - some bureaucrat noticed that the growing debt ascribed on the books to Network Rail was in fact guaranteed by the government; that Network Rail was ultimately part of the state apparatus. So the Railtrack debt was aggregated with the national debt: which made the government's debt-reduction target even less attainable.

And now, suddenly, some other bureaucrat has noticed that housing associations are established as companies. So their aggregate debt [which has been accounted as part of the national debt] should be shunted off the government's books: and that is to be done.

The political importance of that decision is that the government is under huge criticism for the failure of 'the system' to address the dearth of 'affordable housing'. The housing association sector will now be pressured to borrow masses more money - at the prevailing low interest rates - to provide a partial solution to the housing crisis. If the bureaucracy had had the simple common sense to shunt the housing debt off the state's ledger seven years ago, when Osborne began to implement his austerity mania, thousands of homes could now be in use. Under the present regime, politics never offers the right response, even to the most obvious and urgent social issues.

Wednesday, 15 November 2017

Good Old Ken

The MP for Rushcliffe [Nottingham] had agreed to stand down from the House of Commons, had the general election that cost Mrs May her majority not been held. If the last parliament had run to its full term, he would have retired with a good grace.

As things are, Ken Clarke ran again in the recent snap election, and is thus able to take a prominent part in the Brexit debate. As he emphasised in the Commons yesterday he has consistently supported the Tory party's pro-EU stance 'for the fifty years while I have been a member'. The Conservative Party was firmly in favour of remaining in the Union up to and during the referendum. Then Cameron ran away; and the party in a shuffling, sullen way declared that it was bound by the referendum result that almost none of them had expected.

As most of the party wallowed in stunned stupefaction, the tiny minority of Tory MPs who I call the headbanging Brexiteers stepped forward with the fantasy that the referendum vote obliges the UK to leave not only 'the European Union' but also the EEC and the European Economic Area. That this course of action would ruin the country - quickly - has not been considered by the loony right.The thousands of lorries that bring components to British factories from other factories located elsewhere in the common market, and take components the other way, are essential to the continuity of most of profitable UK industry, would be stopped dead in the event of a 'hard Brexit'. This would be calamitous: yet Mrs May is pressured to let it happen [largely, by letting David Davis spin out the sham negotiations until there is no time for rational argument to triumph].

Ken Clarke could be a powerful voice for commonsense; but instead he hankers after the Edward Heath vision of a Britain absorbed into Europe [thus removing the Irish question, as I mentioned the other day].

Britain must leave the corrupt sham democracy of the EU: that was the referendum result. But the economic benefits of the European Economic Area can be salvaged. It is tragic that Kenneth Clarke's obsession with a lost dream prevents such a competent political figure from pulling his weight at this crucial time.

Grace Mugabe

In yesterday's blog I said that Robert Mugabe was unassailable. I still hold to that; but an delighted to recognise that in restating their loyalty to the President the leaders of the Zimbabwean army have asserted that there are 'criminals' surrounding him who are despoiling the state and threatening the Constitution.

Chief among the 'criminals' is the president's wife, Grace: who is half his age and irrationally ambitious. No longer prepared to be left as a manipulator of the next president [whose succession is seen as imminent, in view of Mugabe's age and medical frailty] she has been maneuvering to be designated as the successor. Meanwhile she has raided the state's income and assets as if they were her own, with legendary shopping trips to European, Asian and South African luxury outlets. Meanwhile, and more alarming, her sons have been allowed to spend vast sums of money on their own luxuries and indulgences.

It appears that some leaders in the army [apparently in contrast to a suborned police farce] have a strong sense of constitutional propriety. Following the recent dismissal of the Vice-President [who has sought refuge in China] the army has decided that things have gone too far. Apparently following a meeting in China, the army chief has acted. It is going to be fascinating to see how things play out over the coming days; not least, how the UK and the US will react to the obvious hand of China in this situation.

If the defenders of the Constitution succeed, this will be a great moment for the whole of African democracy.

Tuesday, 14 November 2017

A Glance at Africa

In a Quiz Night yesterday the teams were each given a map of Africa with just the coastline and the boundaries of states shown. The object of the exercise was simply to identify twelve of the very many states that now litter the continent; but the impact of the map was to cause serious reflection about a whole range of issues.

One person emphasised how few straight lines there are, other than the borders of Egypt. This is such a contrast with the boundaries of the majority of states in the USA, where straight lines seem to predominate. Thus arises the observation that although the borders were mostly set in colonial times they tend to follow geographical features, notably streams and rivers [which objectively exist, and cannot readily be shifted] to save all the hassle of establishing and maintaining artificial boundary markers. Donald Trump's wall would be an inconceivable project even along a small length of frontier in Africa.

The next obvious observation was that the borders were very rarely drawn to grant territorial integrity to some ethnic group: all over the continent ethnic groups [even quite small ones] are split between states, and most states have complex ethnic composition which makes political and social compromise difficult - sometimes impossible. The world paid attention - briefly - to the trouble attendant on the two recent attempts to run a fair and free election in Kenya, which is a reasonably sophisticated state with strong institutions and functioning [though anachronistic] legal system. As the frontiers are drawn, the Kikuyu are very clearly the dominant ethnic group: therefore they have a majority in parliament. One hereditary opposition leader drawn from another tribe, whose advancing age makes it impossible that ethnic change would occur to enable his tribe to predominate, has asserted that the system is simply undemocratic and withdrew from the second-run of the election. In his terms, Kenya cannot ever be a democracy in the sense that there is an alternation between parties of government. It may be possible to form some sort of coalition, provided the subordination of the smaller populations is inbuilt into the mindset of the participants.

Some states in Africa come close to being genuinely democratic, with stable governments [think Botswana and Namibia]; but the majority do not. In some, dictators [some of them second-generation] rob the country of wealth for their own gratification; in others war lords control massive swathes of land with conscripted armies that exploit the population to grab the resources that provide the funds with which their guns and bullets are to be replaced.

For the last few decades while the Soviet Union maintained the mission to spread Communism around the world various regimes and guerrilla movements were supported; while South Africa and Rhodesia [as long as they existed in their ugly, racist form] sent expeditions and counter-guerrilla units to oppose them. The further such operations were conducted north of the Limpopo River, the more secure were the governments in Pretoria and Salisbury that armed uprisings were little threat to them. The former colonial power, Britain, ultimately intervened to close down the beleaguered Rhodesian government and force the whites there to accept black majority rule. A democratic constitution was bequeathed to the local politicians, of whom the most powerful were those who had led the various exiled armed groups. For only a couple of years, there was a semblance of following the constitution: then the largest ethnic group [the Shona] grabbed control. The Matabele, who had collaborated most effectively with the white settlers, suffered most as a brutal policy of 'Africanisation' was imposed. White settlers' farms, especially the large ones that were among the most successful businesses in Africa, were occupied and ruined. From being a major exporter of crops, the new Zimbabwe [named after a set of ruins that had been ascribed to a forgotten African 'superpower'] became a net importer of food and the economy collapsed. The president who presided over this disaster was - still is - Robert Mugabe, who is honoured all over Africa as a former freedom fighter. His position is unassailable.

Britain could not make the ex-Rhodesia a democracy. A large army from any of the former colonial  'powers' could not bring peace to Libya, the end to ethnic tension in Kenya or a terminus to any of the other conflicts and stresses to which Africa is prone; and none of the former colonists would think it worth spending scarce resources on political reconstruction in Africa. Even China has recognised the limits of its formerly-aggressive 'economic colonisation' of parts of the continent. The general opinion in even the most democratic and high-minded advanced countries is to leave the Africans to stew in their own problems: and to sell them such military equipment and luxuries for the ruling elites as they can buy, cash-on-the-nail. Nineteenth-century European children were told of their countries' 'civilising mission' in spreading their imperial control over the 'dark continent': twenty-first century  children are told virtually nothing about an embarrassing post-colonial inheritance. And there the matter is left to lie.

Monday, 13 November 2017

A Symbolic Bonnet?

I was brought up, long ago, with the constant admonition: 'do not mock the afflicted!'

I usually avoid doing so; but sometimes it seems that a voluntarily-adopted affliction makes an important point about the person who has adopted it. I increasingly feel this about the prime minister's selection of clothes. I recognise that she is tall and slim: as many leading models are, so there is an amplitude of clothing for women of means who are of those dimensions to choose from. Mrs May's choices vary between the odd and the wildly eccentric; and yesterday at the Cenotaph I thought that she established a new, abnormal norm. The black bonnet that she had selected - possibly it was even designed for her - looked like something that a war widow of 100 years ago would have dressed her teenage daughter in for a remembrance event: yet it was also vaguely reminiscent of a German army helmet. Yesterday it simply looked anachronistic on a grown woman.

But for me it also epitomised her situation. She gambled on winning enough seats in the Commons for the Conservative Party so that she could discount the ten-to-twenty headbanging Brexiteers who for various reasons - including pure stupidity - want to risk national economic ruin by interpreting the referendum result of 2016 as authorising the government to leave the European Economic Area altogether, on a cliff-edge date at the end of March 2019. As she totally misjudged the one-woman campaign that she ran, she lost her majority; since when the headbangers [and the DUP] have dominated her field for policy options. She has retreated into a psychological bunker, from which - so it is rumoured - she continues to radiate confidence that all will become well in the best of all possible worlds: sometime. And meanwhile, as M Barnier has said, the clock on the exit door is ticking.

Yesterday the Sunday Times - never known as a Labour-supporting vehicle - gave a prominent page to an article in the name of Jeremy Corbyn [which was, therefore, at least authorised by him]. In it he presaged a shift of parliamentary arithmetic, implying his recognition of the fact that while virtually all members of the Commons accept that the referendum result [though many of them think it unfortunate] must  - at least, minimally - be implemented. But he also accepts that an overwhelming majority of members have come to recognise that to leave the Common Market and the European Union in a simple step would be a calamity for the country.

To demand a general election - which may become necessary if Mrs May is defeated by the defection of any section of her party - would mean that the current crop of MPs have abdicated all responsibility. It is deeply unclear what the result of a general election would be: but the most probable outcome would be a small renaissance for the LibDems, the Scots Tories at least holding their position, no change in Ulster, Labour gains in Scotland [but the Nats still in the lead] and no clear result from England. Labour might just be the biggest party, though the Tories have an equal chance of that; so the construction of a coalition would be a slow and painful business: while the Europeans could fold their arms and enjoy the British discomfiture and the tick of the clock.

The last time when Britain was in a comparable situation was in June, 1940; when a paralysis of government [albeit, with a strong Conservative majority] faced an existential threat. Talk of coalition was in the air; and Labour had already made clear that they could not support a Chamberlain-led government: though they also accepted that the Tory majority required that any coalition was led by a Conservative. In the crucial debate, as a government supporter spoke for the government, a fellow member challenged him to "speak for England". The government left the debate with a clear majority, but the loss of confidence in them was equally clear. Chamberlain - a sick man - resigned, and the amazing, anachronistic career of Winston Churchill reached its apogee.

Corbyn is no Churchill: he is no patriot, he has supported obnoxious alien regimes acting on the lines of the traduced anti-patriots of whom W S Gilbert wrote they admire "all centuries but this one, and all countries but their own". Corbyn's recent adoption of statesmanlike utterances - at odds with his career-long posturing - is utterly unconvincing: but if he were to prove capable of keeping to manifesto promises [and capable of keeping his close associates within those bounds] he might be useful in the hour of crisis. 

Sunday, 12 November 2017

Remembrance

Yesterday and today the British commemorate the people killed and injured in military campaigns: the official ceremonies are usually focused on those who were serving the crown in the armed forces and the police, fire and ambulance services [as in the London bliz and in Northern Ireland], but allied and associated units are also remembered as thought appropriate. In Australia and New Zealand 11 November stands coequal with Anzac Day, when those two countries recall the carnage wrought upon the Australian and New Zealand Army Corps [hence, the Anzacs] under incompetent British generalship at the invasion, siege and retreat from Gallipoli in the First World War. That tragedy is regarded as the episode that made both Antipodean countries aware that being loyal to the British crown - or even to the British Empire - was not the permanent best bet for the future of their peoples. So far they have stuck with the monarchy, but it is very widely anticipated that on the death of the Queen both countries will take the opportunity to review their constitutional position.

It is absolutely incredible that the Queen still reigns in Australia and New Zealand - obviously, under total constitutional restraint - 101 years after the disaster of the Dardanelles became apparent. It is incredible that Britain and Northern Ireland settled down in 1919 to live under a constitutional settlement that was temporarily patched up until the Irish Free State could be set up in the 'twenties without full-scale war between the Republican/Fenians and the Ulster protestants: a conflict in which the British army, navy and newly-minted Royal Air Force would have been of ambiguous loyalty.

I have mentioned in recent days that the headbanging Brexiteers will not have their way because the Irish question will prove intractable. Peace in Ireland can only be maintained - 99 years on from the first Armistice Day - by keeping the Good Friday Agreement and all that stems from it. Edward Heath combined his failed attempt at peace in Ireland [epitomised in the Sunningdale Agreement] with Britain and Ireland joining the European Common Market together in the expectation that the two would eventually surrender their statehood to the 'ever-closer Union'. John Major led huge steps towards peace in Ireland based on keeping the UK tightly within the Union [as it had become with the agreement - however completely understood - by Mrs Thatcher]. Then the apparently fresh, young Tony Blair was able to bring the process to a very satisfactory conclusion entirely within the EU context. Ireland has always been a major constraint on British policy, and anyone who dismisses that issue as unimportant in the run-up to 'serious' Brexit negotiations is in for a very major shock.

Returning to the main point of today, we can note that the monarchies which had obviously been defeated in the war - the many sovereign German princes, the Empire of Austria and Kingdom of Hungary, and [in effect] Russia - were wiped out; and red revolutions were attempted in Vienna, Budapest, Munich and Berlin. Soldiers with their weapons in hand put down the risings in central Europe, while the navy and the army mostly sided with the workers in Russia to permit Lenin to grab power.

But in Belgium, where much of the country had been devastated by the war, the king returned as a national hero. In Britain during the war there had been rumblings about the king being a German - which, in ancestral terms, he was - leading to the proclamation of Windsor as the royal family surname. The king loyally supported his ministers, while intervening to keep crass generals - first French, then Haig - in supreme command even though their stupidity could not be concealed. Haig accepted assurances that the third major assault on the Somme, known as the Battle of Paschendael, would succeed because such an efficient artillery barrage would be launched before troops were sent 'over the top' that all the barbed wire in front of them would be destroyed and 'not even a rat' would be able to survive the gunfire. The men went over the top, the barbed wire was in place; and as soon as the artillery barrage was lifted the Germans restored their machine-guns to be ready to slaughter the British, Canadian and Indian infantry who were sent forward. Then came the rain, and the churned-up ground turned to deep mud; but Haig sent more and more troops forward for four months, until the Canadians' capture of a small ridge of land enabled the idiots at HQ to proclaim the battle a 'success'. That was just one of the most conspicuous, crass, wastes of human lives that went on from Mons in 1914 until November 11, 1918.

Almost every street and every extended family in the United Kingdom - including, then, Ireland - suffered casualties. Yet the regime, the politicians, the generals and the king were exonerated from blame: individual generals were the subject of loathing from conscripts whose companions had been killed, injured and deprived of their reason as a result of the commanders' stupidity and arrogance, but the regime was not seriously challenged on the mainland of Britain. However, the losses of the war - in men, industrial output wasted, foreign debts incurred and international power - could not be ignored. So a huge propaganda effort, such as had never before been seen, was launched: with massive effect. A temporary 'Cenotaph' - a tall plinth for a coffin - was erected in Whitehall for the first anniversary of Armistice Day, and 'the Glorious Dead' were honoured as national heroes. A couple of years later the 'unknown soldier' was disinterred from a war grave in France and moved to Westminster Abbey, so that every bereaved mother could imagine that her son would ever after be honoured by kings, princes and politicians. That could only continue if kings and princes were kept in place; and so the regime was more deeply cemented in national sentiment than ever before.

This is a spectacular achievement, adopted throughout the Empire and the United States; and with a similar set of events in France and Belgium. Its force in maintaining the socio-economic order is rarely recognised: but the Irish dimension is again being exposed.

Saturday, 11 November 2017

Water

For a decade I was heavily engaged with the water business in the UK. Much earlier, as a development economist in the nineteen-seventies I was made fully aware of the vital role of water in influencing the survival of many peoples, and standards of living worldwide.

I could also note that as the 'green revolution' [already forgotten] was implemented in the 'seventies to enable the huge growth of the human population - without mass starvation - to take place [as it has in the past four decades] there were bound to be problems for the future, deposited by the changes that were being implemented in world farming.

One of the biggest engines of global economic development was the massively increased use of nitrates in fertilising the soil, enabling yields to be increased massively as new combinations of crop breeds with farming techniques pushed up the typical yield per acre; on both peasant farms in emergent countries to the massive acreages under single managements in North America, parts of Latin America, the former USSR and adaptable areas of the European Union like East Anglia.

The cost of treating water for human consumption has included rising costs for reducing the nitrate content of riverwater as more of the stuff has been washed into the rivers in the decades of heavy use. Now the appropriate government agency has produced a report about the 'nitrate time-bomb'. Some of the nitrates that have been absorbed into surface water have filtered down into the middle strata of rocks, and it is inevitable that it will continue to descend until it reaches the deep, porous layers known as the aquifers. These are the rocks that are approached by boreholes, to bring the trapped water to the surface and to be used for human consumption. The aquifers in much of China and some regions of India have been heavily exploited already, and in those zones deeper and deeper bores are needed to maintain the water supply to the growing cities. Although the problem is less acute in Europe, the south-east of the UK [for example] has low rainfall and rising population, and therefore makes significant use of aquifers in periods of relatively low rainfall so that abstractions from rivers has to be limited.

The unstoppable progress of nitrates from past decades' farming towards the aquifers presages a greater cost for water suppliers [whether state controlled or corporate], This is absolutely inescapable: people may be persuaded to use less water - perhaps even by the imposition of 'rationing by price' - but the demand will continue inexorably to demand the expenditure on potability.

As the seas fill with plastic and the toxicity of urban air is increasingly recognised - and redressed - humans' access to the basic absolute necessities of air and water is becoming more costly. In an economy where real-terms growth faltered in the Thatcher era and has since been negative in many years, affording the essentials is becoming more expensive: and 'we ain't seen nothing yet!'

Friday, 10 November 2017

Mrs May: Deadline or Deadbeat?

Theresa May has announced her intention to confirm March 2019 as the date on which the UK will leave the European Union; and has indicated an intention somehow to establish that date in law.

On the same day, a spokesperson for the European Union has said that unless there is to be a 'hard border' in Northern Ireland [which no party in Ireland will accept; and which the British state cannot afford to enforce] Northern Ireland must remain under EU jurisdiction permanently: regardless of what arrangement will apply to the rest of the UK. The Democratic Unionist Party, whose votes in the Commons keep Mrs May in power, thus faces a huge dilemma. The one thing that can deprive them of their majority mandate in Ulster would be for them to be seen on the island of Ireland as the group who  would vote to enforce a hard frontier. However the DUP may decide that dilemma, there is a bigger one facing the UK government.

Can any UK government [Tory, Labour, fragile coalition - LibLab - or 'grand' coalition of three or more parties] contemplate bearing the cost or the odium of renewed conflict in Northern Ireland? This is an intractable question, to which I have drawn attention on previous occasions. The headbanging Brexiteers have put Ireland into the 'too difficult' file, as they busily fantasize about trade deals with countries that have no particular interest in doing Britain a good turn. Ireland has been a determining factor in British politics for centuries: and it is worth remembering that whenever the British think they have found an answer to 'the Irish question' the Irish change the question.

By a vote of 52% to 48% the UK population voted in favour of ceasing to be a member of the European Union: without any deep understanding of the implications of that question. Now that the ramifications of just a few of the implications are becoming clear, the proportion of the literate classes [especially of the civil service, which would have to administer Brexit Britain] that favours Brexit has declined rapidly.

Millions of people - including me - voted 'out' in genuine opposition to the ever-closer union of a corrupt political dictatorship [masquerading behind a facade of democratic institutions]; we also wanted to cock a snook at the British political class [represented by Cameron, Clegg and Osborne] who were the principal advocates of Remain and of austerity. None of us wanted to ruin the country economically. Some 'out' voters accepted assurances that that the world was open for free-trade deals on WTO terms. Some - me included - believed that, in the unlikely event of the 'outs' winning the vote, a continuance of the [Liberal-supported] government that had given us the referendum would negotiate terms that enabled stable economic life to continue. Nobody expected David Cameron to be such an utter coward as he proved to be. Nobody much minded what happened to Osborne: as he has demonstrated, he could move on to adopt half a dozen lucrative careers at once. On the day of the referendum nobody contemplated Mrs May being the prime minister; and we could not have conceived that she would place herself in thrall to people who actually would be prepared to see the British economy dismembered: starting with the crown jewels in the City of London.

Today, in the Silent Ceremony at Guildhall, a new Lord Mayor of the City will be installed. By the end of his year, the die will have been cast as to whether Britain will survive [and thrive] as an economy in association with the European Union, though with greater facilities for trade with the rest of the world.

Yesterday's two announcements - Mrs May's 'firm deadline' for leaving the EU, and the EU's comments on Ireland - are incompatible and will almost certainly ensure that no kind of Brexit happens in March 2019. Meanwhile, Mrs May's government looks increasingly unlikely to survive even to March 2018. The Tories will implode, even if the DUP do not simply repudiate their voting pact. Mrs May's chances of winning a by-election, even in the leafy home counties, are vanishingly small. Politics has become far too exciting; and that is before the inevitable mass movement against economic suicide begins to capture the headlines.

Thursday, 9 November 2017

Declining Britain: Again!

On a BBC News programme yesterday, I heard the UK defined as 'the world's sixth-largest economy'.  I had been used to us being described as the fifth-largest, and had not seen any report of a new league table that relegated us; but that did not surprise me: I can't monitor everything, and we have become adept at burying bad news [as an unscrupulous civil servant suggested on 9/11].

It is no surprise to recognise that we will sometime be reduced to seventh, tenth and even  - ultimately - twentieth unless policy is radically changed. As the superb Anthony Hilton pointed out in last night's Evening Standard, Mrs May's speech on Monday to the CBI Conference took her [and her government] no further forward on important issues; The 'industrial strategy' is yet to be be unveiled: but it is expected to be much less radical than had been expected in the first year of the May regime. There is no indication of the potential shape of a Transitional Agreement with the European Union after March 2019; to the obvious consternation of managers of large and small businesses in all sectors of the economy. The headbanging advocates of Britain being set adrift to sink - alone, alongside only Ecuador - in the cold waters of the WTO Rules, remain powerful in the government - to the extent that the Brexiteers are demanding that Priti Patel [who includes hard opposition to EU membership, or even close co-operation within the European Economic Area, to the stupidities that made her departure from government inevitable] must be replaced by someone with similar views.

Hilton points out that even the triumphant new-technology companies that now dominate the US stock market - Microsoft, Google, Apple etc - benefit from hugely from research that was done in state-funded laboratories decades ago. This observation does not belittle the originality and drive of those who have carried these concept into intellectual property which can then be marketed to millions of enthusiastic customers: they have - and deserve - their billions of dollars. But it does lead to the painful admission that the UK has no comparable corporation under British ownership; even though the country continues to be hugely generative of both deep concepts and and innovative applications of the highest thought. I have rabbited-on endlessly about the small British firms that have been created to implement such ideas, that have been unable to accumulate the finances necessary to support their voracious needs as they pass through the stages of implementation to the ability to deliver a final product to the market, and thus succumb to foreign ownership. In a few conspicuous cases, opportunist buyers have agreed - for the time being - to keep the company HQ and laboratories in the UK, but they can renege on that at any time; and the intellectual property - the all-important ik - is free for them to exploit anywhere, anytime.

A serious Industrial Strategy would provide finance for such emergent companies - or divisions of existing companies - in sufficient quantity and on sufficiently loose terms to allow developments to reach the global market in good time: recognising that not all the guesses can be correct. There will be losers as well as winners [though history shows that losers often have attributes that can be developed in different directions and circumstances to become successful themselves]. Even the sixth-richest country must be able to afford the few billions that would be involved [which the government could borrow on extremely favourable terms, against all historical comparisons].

The UK is also being criticised, deservedly, for its constant reductions in the size, efficiency and capability of the armed forces. One of the regular themes of this blog has been the symbiosis - over many centuries - of money spent on research for defensive weaponry and dividends later gained from the civil exploitation of those technologies, This is precisely the time when the country should be searching for new, super-effective weapons systems, communications and defence capabilities: in which the UK has led for almost a millennium.

Behind all these thoughts lies the need for investment - especially by the state, in combination with people with ideas - to bring new concepts, new materials and new processes into being. They can only be objectified by manufacturing, and it is through innovation in manufacturing that the productivity of the economy can be increased. Factories that produce highly-desired output [regardless of whether the buyer is the armed forces or the mass market] can make significant profits because the customers are prepared to support the exclusivity of the producer firm's ik, part of the profit can be reinvested in new concepts and processes, thus the productiveness of the firm is increased, which means that the average output per employee - the productivity - of the enterprise can be raised and the economy can grow substantially.

This virtuous circle cannot be achieved without individual entrepreneurship [both inside and outside companies] and the active, continuous support of the government. The cretinous Economics that has stressed free-enterprise and free markets with minimum state input has fostered the disastrous decline into which the British economy has been locked for more than a generation.

I will carry on blogging as a small voice for reason.

Wednesday, 8 November 2017

China, Russia and Trump

The President of the USA is due to arrive in China today. It has been much heralded as the first great occasion when the newly enhanced President Xi will be able to demonstrate his mastery of the regime and the magnificence of the show that can be put on for Mr Trump.

In the run up to this visit, Trump has been forced to recognise that there is a very longstanding and close alliance between Russia and China. He has admitted that any plan more tightly to contain North Korea depends almost equally on the two powers that have land borders with that 'rogue state'. While China has been the main supplier of essential imports to the Pyongyang regime, Russia has also been a friendly facilitator over many years.

There is little room for doubt that both China and Russia are sorry that North Korea has developed its nuclear capabilities so far that Kim can be bombastic to the USA: and, by implication, a major nuisance to Russia and to China. On the other hand, they have noted both Trump's reciprocal bombast towards Pyongyang and his deeply ambiguous situation in regard to Russia.

As Secretary of State and as a presidential candidate, Hillary Clinton took a high moral stand on Russia's adventurism in the Ukraine, both the Donbass region and Crimea: she was a major influence on the introduction of sanctions that have affected Russia's trade and the general standard of living of the population negatively and [in a few areas] dramatically. Hence, Russia used all the covert means at its disposal [which are vast] to ensure that Trump had the best chance possible in the general election one year ago. It is very doubtful whether the mass of Russian intervention in any way swayed the election result which, like the Brexit vote in the UK, reflected the despair of swathes of US voters at the failure of the economic and social systems to maintain the American Dream in the rustbucket. The sheer originality - which the literati dismiss as the absurdity - of Trump's approach was combined with a deeply instinctive populism to grab people's attention and stimulate the enthusiasm of the 'forgotten people' in pockets right across the USA. It is noteworthy that Bernie Saunders almost hit the same note from a different pitch, in enthusing the metropolitan young: against him Hillary Clinton displayed increasingly platitudinous arrogance, shouting instead of speaking and thus diminishing any impact that her actual sentences might have achieved.

Russia and China have doubtless agreed a common approach to Trump; based on flattery interspersed with spoonfulls of bitter realism. Mr Xi will spend the next couple of days honouring and further educating the US president. President Putin will be in the same room with them in the following days at the pan-Pacific  conference, and it is there, rather than Beijing, that any new understanding on how to deal with North Korea will be agreed.

At the end of the Gorbachev years I twice made the [supposedly] direct flight from Moscow to Beijing, which each time made a heavy - unannounced - landing in Novosibirsk. This was necessary because the old Illyushin aircraft could not carry enough fuel for a non-stop journey. Both times the most conspicuous cohort of passengers were people with massive bags full of empty bags; whose business was to buy up whatever consumer goods were available from the new workshop-factories in China and take them back to Moscow in their many bags. They had a hard time with Russian customs on the way home [doubtless lessened by cash handouts when the KGB turned a blind eye] but their trade was highly lucrative. Russia has never facilitated the sort of entrepreneurial activity that enabled China to build up its balance of payments surplus with the industrial west, and is still largely dependent on China to supply the everyday manufactured goods that middle England takes for granted [and which mostly come into Britain from the emergent economies, not least China]. In exchange for this mass of imports - which are no longer imported by individual chancers as they were in the 'nineties - Russia can pay in oil and other materials; and by allowing Chinese firms to become farming contractors, mostly in the far east where the supply of Russian labour and enterprise are most thinly stretched.

Russia and China are hugely and closely inter-dependent all along the longest international border in the world. This interdependence was slightly set back by the extremities of the Cultural Revolution in China, and then by the economic chaos that followed from the collapse of the USSR. But the long northern border of Russia with China - right to the very eastern point of the Asian mainland - remains, even though other former-soviet republics now border China to the west. The two economies are even more closely symbiotic than that of Canada with the USA, and there will be no room for doubt that the briefings given to President Trump will have emphasised the point. To general surprise, 'The Donald' appears to have been paying more attention to his briefings of late than he did in his early days in office. He is to be watched, closely, over both his days in Beijing and in the ensuing wider conference. Great-power politics could well be reshaped; with North Korea as the carcass to be picked over; rather than the existential threat that it appeared to be in White House demonology just a month ago.

Tuesday, 7 November 2017

Russia Today

Given his origins in St Petersburg which, as Leningrad, had been downgraded and largely left to rot under the Soviet regime; plus his subsequent career in the KGB, I am continually astonished how ably President Vladimir Putin is coping with the massive range of issues and responsibilities that fall on his shoulders.

He succeeded the drunken shell of the once-outstanding Boris Yeltsin, under whose presidency of Russia - just one of the successor states to the collapsed Soviet Union - the crumbling economy had been despoiled and brought to the brink of ruin. Crass and corrupt 'privatisation' [which had supposedly been intended to hand out shares in all major assets to the mass of the people] had enabled the most competent of the former 'fixers' to acquire control of massive corporations and rightly earn the description as 'oligarchs' and as a 'mafia'. Under the Soviet regime, especially when strict Stalinist controls and planning targets were relaxed, the economy was only able to function by factory managers and farm directors operating a massive black market in which clothing and shoes were bartered for industrial output and food, so that the towns' workers could be fed and the oppressed involuntary farmhands shod; while the factories and farms turned in less than their planned output to the official channels of distribution. This huge trade was managed by risk-takers who were occasionally arrested when one of them failed to bribe the local party officials sufficiently, or when some illicit trade became so much of a public scandal in the region where it was perpetrated that action simply had to be taken to restore some credibility to the regime.

The spread of television gave millions of people more awareness of how low the standard of living for hard-working Soviet subjects had become, in comparison to western Europe and the USA. The diffusion of access to telephones allowed millions of people - especially in western Russia, Belarus, the Ukraine, the Baltic Republics [which had slightly better access to knowledge of Scandinavia] and the European satellite states - to begin personal bartering to raise their own standard of living. Swapping knowledge, access to better schools and hospitals, and admission to the queue for buying cars, electrical goods, western records and properly-made jeans. This development of trade went on through the stagnant years of Brezhnev's presidency, and reached such proportions in the early years of Gorbachev's rule that his government took strenuous measures to drive this illicit trade further underground so that the government's plans to develop a real consumer economy might have some chance of success. With the collapse of Gorbachev's regime and into the chaos of the Yeltsin's years, it was only the illicit swap economy that kept most households going. as the formal economy collapsed.

Putin's achievement has been to create something very broadly like a market economy in less than twenty years. This accomplishment has been unprecedented: and it is recognised by the genuine 80%-plus approval rate that the president has received from the Russian population. The many faults of the regime, the corruption and the acts of oppression that are far too common, are well reported in the west. Those are is important aspects of life in modern Russia, which in an ideal world would quickly be rectified: but priorities have to be set, and a broad consensus of the population accepts the sequence that has been adopted.

Monday, 6 November 2017

Russia's Revolutions

BBC Radio three is presenting a series of programmes of Russian and Soviet-era music in commemoration of the centenary of what they call 'the Russian revolution': and the presenters have called the series "Breaking Free". Who exactly these denizens of the BBC reckon became 'free' as a result of the second - the Bolshevik, or Soviet - Revolution is not clear. By the mid-twenties, after the death of Lenin and the rise of Stalin to almost-complete power, composers, playwrights, and artists had to become careful about their output. As Stalin and his significant army of associates consolidated their hold over the new order, with the purges of the 'thirties and the 'forties, musicians and other cultural figures - who were allowed to be named in the media - were persecuted by imprisonment and worse [assignment to slave labour camps and the constant risk of 'administrative' death sentences] if they exposed themselves to the suspicion that they might have dissented from actions by the party and its current leaders.

Only the party leaders, the commentators who praised them and the artistic community were named in the media and thus known to the mass of the populace. Therefore any deviation from the sort of 'socialist realism' that Stalin approved was likely to result in the victimisation of a perpetrator who was one of the nomenklatura. Stalin considered himself an aficionado of music and ballet, enjoyed theatre [when he approved of the content of the play] and was a voracious reader, making a massive number of marginal comments in his books: both fiction and non-fiction: so no writer or performer could escape his critical oversight. He also followed Lenin in being a massively prolific writer. In speeches several hours long, in newspaper articles [often written anonymously] and in longer texts Stalin set out the party line. There is no doubt that Stalin worked hard, often far into the night: after which he was often ready to booze until dawn with the changing cohort of his intimates. Over the decades the tenor of his output changed, according to circumstances and to the writer's changing moods; therefore the literate classes had to review continuously what they kept openly on their bookshelves, hiding away [preferably, destroying] editions and items which expressed views that were no longer acknowledged by their originator.

Stalin himself was not 'free'. He had to lug his impedimenta of Marxist-Leninist dogma - as reinterpreted on an almost-daily basis by himself - everywhere he went, because he saw that as his legitimating authority. Provided he wrapped up everything that he said and wrote in party-speak, he felt that his utterances were authoritative. An added difficulty with this arose from the fact that he was not a native Russian speaker, and apparently some aspects of sentence construction always eluded him when setting out his stall in the prevailing language. Thus his followers sometimes had to develop their own exposition of what they assumed he had said, in handing down the message to the underfed, tired cohorts of heroic proletarians whom they sought to urge on to ever-greater efforts in the cause of 'socialist construction'.

By the outbreak of the Great War in 1914, Imperial Russia was already the world's ninth-greatest industrial producer, and the fourth-biggest economy in the world [by estimated turnover, or GNP]. During the war massive investments were made in mines, steelworks and industrial plant in the Ural mountains, well away from the old industrial areas of Russian-ruled Poland and the Ukraine which were dangerously close to the front. There was a constant danger during the war that the Germans and/or the Austrians would be able to capture the long-established heavy industry around St Petersburg and in the western provinces. So the Tsarist regime promoted massive development of industry  in the east, much of which Stalin was later to claim had been built on virgin territory under the succession of five-year plans by which the Stalin regime claimed to be 'transforming' the USSR. It is unclear how much of the 'new industry' that turned out the tanks and the guns for the Red Army after the Nazi invasion of 1941 was actually new under Stalin, and how much came from the Tsarist war economy: and at this distance in time the resources of economic historians may never be sufficient to find out.

This blog can only scratch - very slightly - at the surface of the massive issues that are disclosed as soon as the Russian Revolutions of 1917 is to be studied. In the coming days I intend to look as just a few aspects of economy and society in an era that should have been exciting, but which was made massively more oppressive and depressing than the society and the regime that had existed before the first revolution.

Sunday, 5 November 2017

Corruption Catch-All

In the coming week I will revert to the theme of the Russian Revolutions and their consequences; but the overnight News about Saudi Arabia, combined with discussions of the current situation in China as President Trump attends the apotheosis of President Xi, raises an omnipresent global issue.

The Saudi Crown Prince has emerged in that role after an elaborate process to bring [at last] a grandson of the hugely prolific founder of the country, Abdul Aziz Ibn Saud, into the pole position to be the next king: the first of the next generation to have a high degree of probability of succeeding to the notionally absolutely powerful top position. From the nineteen fifties until now a succession of sons of the first king, by a succession of his wives [many of whom were sisters, cousins and other close relations of each other], have held the post; but the lastborn among them are now in extreme old age. There is probably a registrar of the dynasty who knows exactly how many princes and princesses there are, including the offspring of Ibn Saud's brothers; many of whom are intermarried with each other. The international media report their number to be some thousands as, unlike the British Royal Family, all the family members have royal titles.

The contrasting British position is that sons and daughters of monarchs are princes and princesses, but that children of princesses and children of daughters of the monarch's sons and sons of the sons of the monarch who do not stand in the direct line of succession are not princes or princesses. Thus the children of Princess Anne, and of the Dukes of Gloucester and Kent [sons of sons of George V] are not princes or princesses. This keeps the 'inner' or 'close' royal family manageably small.

The contrasting situation in Saudi Arabia means that these thousands of royal persons expect high status and high incomes; which were affordable when the family was smaller, the oil price was higher and the monarchy was able to use its position as the 'swing producer' in OPEC to enforce the price control system that they established in 1973. With ever-more royalty and shrinking oil prices as Russia increases its influence as an oil producer and fracking develops in the USA, the Saudi model of the past century is redundant. The new Crown Prince has spent the last two years securing his position among this thousands of cousins, and is now making moves to modernise the system. There are bound to be winners and losers from such a revolution, and alliances have been formed that may or may not prove strong enough for the Crown Prince to consolidate his position for a reign of up to half a century. He has now made the big move: the arrest of dozens of individuals [including several royalty] some of whom have been ministers in the government: all of them charged with corruption.

In a system like the Saudi, where the term Byzantine denotes a situation insufficiently arcane to explain the regime in operation, almost anybody - high or lowly in terms of hierarchy - can be charged with what a German or a Belgian would recognise to be corrupt practice. Charges of corruption will be upheld against many [if not all] of the arrested parties; and the purge can go on indefinitely, as in the Stalin era in the USSR where ever-wider definitions of crimes against the state can be used simply to keep all the survivors in a state of abject subordination to the dominant power. It will be the greatest challenge for the Crown Prince, if he succeeds i holding his position through this exercise, to stop when the purge has gone far enough.

President Xi's situation in China is similar to that which the Crown Prince clearly intends to prevail in Saudi Arabia. In his first five-year term as head of the party and head of state Xi has ensured that nobody stands to challenge him during the coming five years in a way that could ensure that he is forced to stand down after his second quinquennium.  China's rise to wealth has been faster and much more broadly-based than in the case of Saudi Arabia. The control of the country by the party has meant that the power-brokers in every region have been able to grant and deny licenses and permissions for every kind of activity; thus successful individuals in the buccaneering capitalism that has emerged have necessarily squared themselves with the power structure. Some people in power have held to the standards of Confucian and Leninist integrity that have been expected of them: some have not. Some can have cases manufactured against them, in what is ultimately a dictatorship: some guilty people can be so useful to the top men that their crimes can - pro tem , at least - be ignored.

Precisely the same sorts of process are happening in China and Saudi: the consolidation of the power of the dictator is secured - and gains at least a good measure of popular support - by bringing guilty exploiters of public office to account. Simple!

Saturday, 4 November 2017

Revolution and Reaction in Russia

It is a fascinating aspect of human society that in the year when the two Russian Revolutions of 1917 are being remembered there is also a furious lobby of individuals who oppose the screening of a film about the life of the last Tsar before he came to the throne. In rehashing a story that has been common knowledge since the events occurred, Tsarevitch Nicholas is show in the throes of a highly-sexed  relationship with a dancer from the St Petersburg opera. He was simply doing what many of the nobility did. The story has been made into a film, whose producers hope to cash in on releasing it to coincide with the centenary of the second revolution. Unluckily for the producers, since the collapse of communism the careless disposal of the imperial family's remains has been exposed, bones from most of them have been identified [with the help of DNA from the Duke of Edinburgh: a reminder that he is a very pukka royal prince] and the Orthodox church has deemed the Tsar to be a saint; if only because he died a 'martyr's death'. The consequence is that the film - though it tells [somewhat sensationally] a true story - has been condemned as blasphemous.

For me, this incident is a perfect vignette of what has happened in Russia in the past thirty years; when those decades are set against the grim background of the previous nearly-seven decades of increasingly bankrupt Marxist-Leninist dogma in conflict with the realities of twentieth-century existence.

The March Revolution saw the abdication of the Tsar and the establishment of a Provisional Government. This group of liberal-conservative democrats struggled in vain both to establish a viable political system and to continue to fight the Germans. By this third year of the First World War Russian losses where huge, the significant capacity of Russian industry and railways had been stretched too far for too long and the soldiers were fed up of fighting under incompetent command with insufficient supplies. Mutinies were commonplace, even without the added stimulus to revolution that was added by the communists. The Germans facilitated Lenin's return to Russia, the Provisional Government recognised him as a potent enemy of their nascent state, he was able to escape arrest and begin to work with Trotsky, Stalin, Molotov and others to foment his more fundamental revolution.

The Provisional Government wanted to create a genuinely democratic republic; building up from the parliamentary institutions that the Tsar had created in 2005. Lenin was out to crush capitalism [including farming by free peasants] and recognised that the destruction of democratic institutions was a necessary step towards that end. Thus he was set to overthrow the state, capture all power for his communists and for the local trades councils - the soviets - that could be manipulated and 'educated' in Leninist dogma, and establish a pseudo-state that was wholly under the control of the party. The country descended into a half-hearted civil war. The Japanese sent troops to the Russian far east, without any particular objective, and they were later recalled home. The British sent a force to Archangel in northern Russia, but they never found sufficiently organised Russian democratic forces to align with in restoring some sort of democracy and they, too, were withdrawn.

Lenin and his gang were left to make what they could of the vast Russian empire. I will carry on with this account for a few days: at least, it will be a relief from Brexit and the collapse of UK political institutions.

Friday, 3 November 2017

Some Distinguished Economists

I remember a time when the Econocracy had not yet emerged. Economics was beginning to flounder, as the NeoKeynesian orthodoxy that had been established in the nineteen fifties  began to reveal its fallibility in the emergence of excess inflation in the 'sixties; which was to lead to the chaos of the 'seventies and the rise of Monetarism that paved the way for the free marketeers who were the founders of the Econocratic hegemony that currently prevails.

For any reader who might happen upon this blog, and wonder what planet I am writing from, I explain that the term Econocracy has been created by the Post Crash Economics Society, a Manchester-based student movement that has successfully challenged the prevailing orthodoxy in formal Economics that has given us the 2007-9 crash, declining living standards, decayed industry, an intractable balance of payments deficit, austerity and [in a public backlash] the Brexit calamity. The Econocrats are the professors and established lecturers, senior lecturers, readers who demand of their students credulous adherence to the dogmas that have led to the ills in society and the economy that have just been listed. The Manchester group have produced the book - Econocracy -in which they explain the term in its context. They have also published research that shows how closely most university courses follow the 'official' line.

I was fortunate to pass through a university system that was vastly smaller than it is today: fewer than forty fully-fledged UK universities, and many of them had only one professor of Economics and up to six other teachers. I find it astonishing now to look back into old university Calendars and find that whole degrees were delivered by teams as small as four academics. The Great Man of the 'Economics profession' was Sir John Hicks [the first British recipient of the pseudo-Nobel prize], but the dominant individuals who decided who got appointed to which vacant chair in Economics were Lionel Robbins [Lord Robbins of Clare Market] the unchallenged boss-man of the LSE and Charles Carter, founder VC of Lancaster University and editor-in-chief of the highly influential Economic Journal.

Typically, syllabuses contained an element of Economic History [which would greatly benefit the students of today] and also a paper on the History of Economic Thought. Mathematical aspects were not prominent, and could often be avoided: in my own university it was even possible to evade the simple Statistics course by opting for Ethics. By 1945 all universities [so far as I know] had supplanted JS Mill as the basic source text by Alfred Marshall's Economics,  and they all taught about Neo-Keynesian macroeconomics. Paul A Samuelson and JK Galbraith were the best sellers among a raft of fat textbooks that combined those two syllabus areas; and when I joined the University of Sheffield as a research fellow there was a well-established game by which students tracked Prof JC Gilbert's lectures through the textbooks.

One great characteristic of the small number of leading professors of the subject was their difference in emphasis and research orientation. Bob Black at Belfast, Terence Hutcheson at Birmingham, and Ron Meek in Leicester provided a choice of interpretations that is painfully lacking today. Mark Blaug, though he went through much of his career in the shadow of Lord Robbins, was a good independent scholar. It is very sad for the subject and for the country that such a range of talent is not available today.

Thursday, 2 November 2017

Redwood - Dead Wood - Tinder - Conflagration?

I have always thought that John Redwood was better than he is generally presented by the liberal media. He has seemed - to me - more sensible than the hard core of boneheaded right-wingers who have made the prime ministerial careers of John Major and Theresa May unnecessarily difficult. There was, of course, the extreme embarrassment of him being filmed [as Secretary of State for Wales] trying to move his lower jaw in time to the Welsh National Anthem: and failing utterly. But in general I saw him as a 'trier' who was honest and not lacking in intelligence.

Then I saw a bit of his performance in the House of Commons yesterday: oh dear!

The issue was Brexit. His face was distorted with extreme, vitriolic anger. He was fed up, he declared, with the people who do this country down. The remainers and the soft Brexiteers - from his perspective - belittle this great country. Of course we can stand alone in the world, and triumph economically [with the implication that this task is trivial compared to the glorious achievement of solitary Britain in 1940-42].

It was painful and tragic to see him reduced to such a stupid and irrational argument. In descending to this lack of serious content his speech was about the best argument against his side of the issue that I have yet encountered.

The hard Brexiteers ignore the realities of the economic situation in the world. WTO Rules do not offer a safe basis on which the UK can instantly build a pattern of close trade deals with countries outside the European Economic Area, as has so often been stressed in this blog. Tariffs are not the key issue: regulations and quid-pro-quo deals that get round WTO standards dominate in world trade agreements, and the UK does not have the intellectual resources of trained manpower that would be needed to get even tentative interim deals in place by March 2019; or, indeed, by December 2021.

By declining to vote in the Commons yesterday, on the motion to publish the dossiers on 52 sectors of the economy and the potential impact on them of leaving the EEA, the Conservative Party again displayed that it has lost control of the House. It is almost certain that when these dossiers are released, they will provide a massive stock of ammunition for the remainers and will seriously undermine the sanguine daydreams of the hard Brexiteers.

The resignation on the same day of the  highly-regarded Defence Secretary, on grounds that most men [and many women] of his age and origin would think to be spectacularly trivial, indicates to me that Sir Michael Fallon welcomed an excuse to get out from under the bonfire that is being built in the Tory party.

Redwood is - in political terms - dead wood, tinder dry; ready to support a conflagration that could end the two centuries of Conservatism as the dominant political organisation in the United Kingdom. The arch-Brexiteers would [apparently] force the collapse of the May government if their diabolical mission to undermine the economy is defeated. An election before Christmas has become a strong possibility; thought not yet probable.

Corbyn has always regarded the EU as a capitalist club: so he has been against it, even though Labour under his leadership notionally supported the remainers in the 2016 referendum: where millions of old-Labour voters went the other way. I doubt if the Labour leader has a clear view of what the European Economic Area is: and it is problematic whether Keir Starmer can bring him to a sensible stance on that matter. This is the one factor that could loose a December [or February] election for Labour. Politics have suddenly become much more interesting: and more frightening!

Wednesday, 1 November 2017

Bitcoin Marches On

Nobody really knows what 'Bitcoin' is, or what damage it can do to the global economy. Some people know [but do not tell] who invented this 'virtual' pseudo-currency; several dozen people and firms have made money from trading in it, and it is rumoured that some people and firms have played in the market and lost.

No government has responsibility for bitcoin; but several governments could find themselves dealing with a crisis which arose from reckless or careless trading in this medium to the extent that it impinged badly on their national economy. It would be unconscionable if any government required its taxpayers to assist any firms or persons who found themselves in a bitcoin crisis; and it would be politically disastrous if any government thereby plunged its citizens into a decade of reduced living standards as the British government did with the bale-out of the banks in 2008.

There have been plenty of warnings from well-known market players, to the effect that this totally unregulated free-enterprise market has no substance and can thus cause major disruption in any economy that allows assets designated in this nonexistent medium to take a prominent place in anybody's asset register.

Despite this, and despite asserting even a few days ago that they would never allow their platform to be used for bitcoin-denominated trades, the CME [formerly known as the Chicago Mercantile Exchange] has announced that bitcoin will be allowed in trades passing through their books. It is immaterial that this is experimental, and is envisaged only ever to be a small sideline in the market. The big point is that one of the world's largest and most important exchanges has legitimated this bastard child of greed.

Gordon Brown's memoirs are being marketed, for a big launch next week. He would not have wished it, but the commentariat will concentrate primarily on his failure to develop a mature prime ministerial personality [with the resultant tantrums and failures] and on his success - with Alistair Darling, the Chancellor of the day - in 'saving' the world banking system; at the long-term cost of the British people. In extracts that have been released already, Brown makes it clear that he deplores how completely his successors [the Tory-Lib coalition, the Cameron government and now the May regime] have totally failed to reform and rebuild the banking system so that it has the clarity of structure, the strength of reserves, and the separation of banking from wholesale gambling that were shown by the crisis to be absolutely necessary.

The Bank of England has warned that some 75,000 City jobs will migrate to Europe unless Britain gets a Brexit deal that keeps the country within the European Economic Area: but that is just the start of the catastrophe that could be played out if the bonkers Brexiteers ally with the 'free markets' lobby of wholesale gamblers in making the claim that any losses from legitimate banking and financial trading within the EU context can be replaced by growth in 'virtual' finance and betting.

Media muckrakers have found that Jacob Rees-Mogg was a notably unsuccessful fund manager in the period when Gordon Brown was at the apogee of his power, before the 2008 market failure. He is not a believable prophet of supposed good times that can follow from a 'hard Brexit'; nor is any other of the vociferous minority who are agitating for Britain to be plunged at the deep end of the shark-infested global market: if any of those buffoons comes out as an advocate of bitcoin, that will be proof positive of their intellectual limitations and perversity.

Tuesday, 31 October 2017

Tinkering With Time

During the First World War it was considered a masterstroke to create 'daylight saving': now known as 'summer time'. The idea was copied among the combatants, and during the second such war most countries adopted it, with several opting for a period of 'double summer time' to increase the effect of shifting the clocks forward during the northern summer.

This was in a horsepowered world, where almost all factories and homes were lit by gas, as were the streets and places like railway stations. The best force in the Second World War, the German Army, suffered in Russia particularly badly because it was still reliant heavily on horsepower, and as the horses died [often to feed the under-provisioned troops] the mobility of the army was massively diminished.

At the end of the Second World War it was simply taken for granted that the annual shift to summer time, by at least one hour, was economically [and thus militarily] efficient; and summer time was carried forward all over Europe. In the few years when the date that Britain [or some other country] opted for a different date from other countries' choice to change the clocks, massive chaos was ensured. So even though Britain's clocks are one hour behind those on the continent all year, the date on which they shift to summer time is mutually agreed.

There is now a growing lobby of those who argue that with a different technological environment there is no need to retain summer time. Poland has indicated that they may opt out of the shift to summer time as early as next year. There then follows the subsidiary argument, should a fixed all-year time be based upon the present winter time, or on one [or more] hours away from that?

The UK was able to impose the Greenwich meridian as the zero point for the global navigation system, and Greenwich mean time followed as a norm for the Empire [only after the failure of a huge push from the French for the Paris meridian to be adopted]. It seems obvious to Brits that if there is to be a standard all-year time frame it should be Greenwich: after all, the mornings are brighter for more of the year that way, and street lighting nowadays is sufficient for children to get safely home after school. Farmers point out that their animals do not understand the eccentricity of humans shifting clock-time, so they have to work by GMT all year anyway.

There will be no quick resolution of the issue, even after Brexit; but it would be a relatively low-cost way of the Brexiteers emphasising the difference that quitting the EU could make; regardless of what the Poles may do.

FOOTNOTES:

1. I was not at all surprised when the 'heroes' of the Catalan independence movement scuttled off to Belgium yesterday. Their stance always seemed to be a posture; but I did not think that they would cave in so completely. People who believed in them must be hugely disappointed, especially the young. As all the opinion polls show that the minority in favour of independence is shrinking, even without the unnecessary police violence in the recently aborted 'referendum', it seems that the election this December will settle the matter, at least for a generation. In this context, the flight of the leadership should be a major turning point.

2. Equally unsurprising is the gathering news that crooks and spivs joined the Trump bandwagon last year; and some are now being arraigned. The whole campaign was an ad hoc affair: populism necessarily depends on such eclectic coalitions, and Trump himself is not necessarily damaged by the present revelations.

Monday, 30 October 2017

Budget Lobbies

A British Government Budget is due to be presented to the Commons next month, therefore the lobbying has begun. Besides the usual sectoral claims from welfare interests and business, a whole range of Brexit-related fears and expectations are being pressed for the Chancellor to take note of.

The situation is bedevilled by the Brexit situation - which no-one, inside or outside government has any grip on - and further complicated by the fact that the Chancellor's 'responsible' stance [largely what the business community have demanded: to keep as far in to the European Economic Area as possible, after formal withdrawal from the EU] is under vicious and sustained attack by the headbanging Brexiteers.

Behind all this, lie crucial social and economic facts. There is no doubt that the National Health Service, the schools, the police and the armed forces are grossly underfunded. This is not simply an issue of how many billions of pounds are spent on those services: nobody can deny that aggregate allocations by the government are increasing [though some services, like the police and prisons, are struggling with the effect of previous real-terms cuts]. The essential point is that what the government has allocated is much less that is needed to meet the expectations of the changing population.

Osbornian austerity has been in force for seven years, during which the economy has stagnated. Real terms economic growth, especially in material output from factories and farms, has in most sectors declined. There is now a major milk shortage in western Europe, including the UK, because the supermarkets drove down the price of raw milk so far that hundreds of farmers went out of the business [at huge personal loss, with the slaughter of thousands of specially-bred animals]. More conspicuously, manufacturing output has declined, and productivity in most sectors of industry is at best the same as it was in 2005. Since the population is larger than it was in 2005, including more school-age children and over-seventies, the needs of education, health and welfare are growing: and the state's spending on educational and social services has not kept pace. Meanwhile, the capabilities of the health service improve and extend life have greatly advanced: if only those improving resources and facilities can be afforded, with people trained and available to provide them.

The state should be spending massively more than it is. The Chancellor and his team know this all too well; but they are steeped in the Osbornian dogma that extra spending can only come from extra taxation or extra government borrowing. Extra taxation will reduce the money that people and firms can spend on their items of choice, so 'demand' will decline; so the private sector of the economy will decline in total turnover. Extra borrowing will give the government and taxpayers higher interest bills to pay in the future: so it is an imposition on future generations that would be inexcusable to impose it. So the Treasury team is stuck with the existing austerity mantra.

This is not the whole picture, however. It is unfortunate that the deeply untrustworthy John McDonnell has been the cheerleader for an alternative proposition that really should be implemented.
In the medium term, the only way of paying for increased and improved public services is by getting more tax from the whole economic system because it is growing. A really growing economy can both pay more wages to employed people and yield more taxes for pensions, benefits, hospital, schools, police and the other essentials.

This policy option does require the government to borrow massively more money: earmarked for investment programmes of improved infrastructure [roads, railways, hospitals and housing] that provide economic returns by providing a healthier and happier and less-stressed workforce.But the government should foster much more borrowing and spending for investment in industry, agriculture and offshore activities both around the British isles and around all the UK's overseas territories [which have been wasting assets since they ceased to be needed as coaling stations and watering points for historic commercial shipping]. It is clear that robotics, 3-D printing, artificial intelligence etc are major components of the future pattern of industry; and that Britain is still a major contributor of new ideas. These are both in microprocessors and in new and improved materials that can stand the more extreme demands of the new era. The government should foster at least a dozen of the  technologically fruitful universities as hubs around which other universities, research associations and individual firms can gather their work on new things. There will always be depressives who say that you cannot guarantee which ideas will be successful and which not; so you should do nothing. That is not how the great achievements of the past were made. Bold ventures must take bold chances, and expect some failures: while experienced managers can spot cases where the money is running away faster that output is developing. And the state should provide a lot of money [from borrowing] to float the whole thing.

Companies have built up the biggest reserves ever, and have paid large dividends while not investing in new plant or higher productivity in their existing plant, and they have bought-back shares; or they have bought other companies [usually proving the old adage that the sum of the returns from two merged companies is rarely more than half of the combined return before the merger]. They should be taxed on what they hold in reserve, taxed more on what the declare for dividends, and given massive tax relief on genuine material investments. It is all so simple, so obvious!

New and improved plant is the only way to enhance productivity. Enhanced productivity is the only way to get substantive economic growth. Economic growth is the only way to get more taxation painlessly out of an economy. Taxation is the only way for governments to get the money they need to spend. Simple!

Sunday, 29 October 2017

Brexit Buffoons and the WTO

Nobody who voted, either way, can claim to have understood the full implications of a 'Remain' or of a 'Leave' vote in the 2016 Referendum on Britain's place in the European Union.

It is almost certain that the great proponents of Remain - Cameron, Clegg and scaremaster Osborne - had no idea in advance how they would interpret, then implement, the Leave vote that occurred. Cameron ran away from responsibility:and even a gold-plated palace would not be a sufficient environment in which to write the exculpatory memoirs from which he hopes to make a pile of pennies. The fact that he has bought a sort of gypsy caravan, reminiscent of certain dead children's writers, for the purpose displays his ability to compound folly with ever-deeper illusion. Since the guilty men and their followers [and their mentors] had put the question to the nation, they should at the very least have had transparent contingent plans. They evidently did not. Nor did the civil service have anything like an adequate plan for what would happen after Cameron ran away, Clegg went into obscurity with his party, and Osborne's toxicity with the electorate was recognised by the new prime minister [of whose judgement and capabilities Osborne had been a vigorous critic when they had sat together in cabinet]. Evening Standard editor Osborne has been intermittently sensible in his comments on the Brexit situation, but he remains so much in the public mind as the author of the twin disasters of the Cameron era - austerity, and 'operation fear' in the Brexit campaign - that his political resuscitation is most improbable.

The prominent 'leavers' - who were far fewer than the high-profile 'remainers' - appear to have undertaken even less preparation than the remainers to meet the contingency that their side would actually win. The clownish assertion - written on their battle bus - that the net amount someone had calculated on a chewing-gum packet as the net annual payment made by the UK to Brussels would instantly be available to allocate to the National Health Service, resonated with a population that was all too aware that osbornian austerity was depriving family and friends of treatment that could be available. Whether the sum was in any way valid as an arithmetical calculation or an allocable fund did not count with those who used it. It was merely one  of a few desperate claims that they made to align themselves with a population that was disgusted by the failed political class and utterly unconvinced by the econocratic arguments that underpinned austerity. Boris Johnson became a more popular buffoon, becoming recognised outside greater London. Michael Gove surprised people with his articulateness: only to earn buffoon status for himself by his last-minute, half-cock, ill-considered decision to stand for the party leadership after Cameron scuttled away [thereby sparing the party from the embarrassment of having Johnson as their leader].

Mrs May began her period as prime minister well, with conciliatory speeches and the dismissal of Osborne; since which she has got everything wrong that was within her power to influence. She called an election unnecessarily then threw it away. She activated the withdrawal procedure with the EU before she had any clear plan. But from the start she made clear her utter incomprehension what she was dealing with, when she said 'Brexit means brexit': while everybody knows that the word itself is totally meaningless. While she has struggled, with a group of spectacularly inadequate ministers, to define what Brexit might mean the country has drifted towards the disaster of leaving the EU with no interim deal that will keep the UK effectively [under deep make-up] within the European Economic Area.

This has created a field day for the couple of dozen Tory MPs who appear really to believe - in their enfeebled minds - that the World Trade Organisation [WTO's] tariff regime will enable Britain to survive as 'the fifth-largest economy in the world'. The whole point is, that it is NOT tariffs but REGULATIONS that are used by all countries and economic communities to keep out unwelcome competition. Inside the European carapace the UK necessarily conform to the rules, and thus its trade with other  EU members states can move freely. To loose that benefit, with the block that sends and receives about half of Britain's imports and exports, would be irreplaceable. The assumption that German motor manufacturers and French wine growers will 'see us right' is infantile. Professor Minford's calculations of the 'benefit' for Britain of trading on WTO terms with the global community - including the EU - are agonisingly bereft of any allowance for the predominant pattern of restrictions on trade, that would be tightened against an innovative economy such as the UK if we were adrift in the world and thus are extremely dangerous. But those are the argument to which the headbangers adhere: because they have nothing else. Yet they hold the government in awe; and are increasing their power to ruin the country. I will have to return to this topic in the coming days, as the argument gets more fraught approaching the deadline for the next meeting of EU heads of government.

Saturday, 28 October 2017

The Sovereign Club, Crimea and Catalonia

The Spanish king and his government are adamant that there should be no truck with a purported 'sovereign' administration that has just been announced to exist in the region/province of Catalonia. The United Nations has asserted that a 'solution' should be found within the Spanish Constitution. Washington has declared that Catalonia is simply part of Spain, and that fact will not change in the perception of the United States [which fought a very nasty civil war to preserve their Union]. Britain, France and Germany have made similar assertions: there will be no recognition of a rebel 'government' by any European Union member state.

President Putin deeply deplores the fact that the Gorbachev administration in the last stage of the Soviet Union acted in accordance with the 'Stalin Constitution' which had enshrined the myth that the state was a federation of independent [largely ethnically-based] sovereign republics. This was very particularly Stalin's constitutional speciality. He had been sent to Vienna in the early years of the twentieth century to find out how the Habsburg regime was coping with the question of Nationality in Austria-Hungary. Slovaks and Czechs were asserting that they were distinct national groups, with a right to statehood of their own. Minorities of the population spoke Romanian, Polish, Ukrainian and various forms of German in distinctive territories split between the Kingdom of Hungary and the Austrian Empire  [and the latter contained a massive range of entities from the Kingdom of Bohemia to small counties that were notionally sovereign]. The heir to the throne [Franz Ferdinand, who was to be killed in 1914 thus triggering the war that ended the monarchy] was said to want to change the 'dual monarchy' of Austria-Hungary into a 'trial' [or triple] monarchy with autonomy for the Slavs, in deference to his Czech wife.

Stalin produced a convoluted account of his thoughts on nationality, and after the revolution he was appointed Commissar for Nationalities. As the Soviet Union consolidated its absolute power over all the former Russian Empire, except Finland, it did not matter that a constitutional charade was enacted whereby the political entity was asserted to be a federation of notionally independent states. However, come the end of the Second World War, in their anxiety to keep Stalin on-side with the new United Nations, Britain, France and the USA agreed that three of the Soviet republics should each be independent members: Russia, Ukraine and Belarus. After Stalin's death, Khrushchev - a Ukrainian - almost casually transferred the Crimea from Russia to Ukraine: it did not seem to matter, at the time. The facts that the Crimea had been hard fought for under Peter the Great and Catherine II, and was seen as strategically important, did not cause any controversy while the USSR was operated as a single hegemonic state.

However, suddenly in 1990, the USSR collapsed; while the Communist party stooges who held office as the presidents and premiers of the various [formally fully sovereign] Socialist Republics simply colluded to ignore Gorbachev and his collapsing central authority and go their own ways. The largest component of the Union, Russia, had the charismatic Boris Yeltsin on hand to crush a half-cock attempt by party old hands to reverse all the democratic changes that Gorbachev had instituted: and as head of the Russian Republic's government Yeltsin established his hold over the biggest and most complex Soviet Socialist Republic; thus of Moscow. A notional federation was established of the former Soviet Republics, while the asserted sovereign authority in each of them began doling out the national assets to their families and friends. The Russian Republic itself became the Russian Federation including all the Autonomous Republics and Regions that Russia has inherited from Stalin's manipulations of notional boundaries. Yeltsin and his associates employed American Economists to assist them with a hugely corrupt and corrupting 'privatisation', which transferred much of industry to the hands of the so-called 'oligarchs' and caused massive deprivation to the mass of the population.

Putin's rise to power came after the damage derived from Stalin's constitutional machinations and Yeltsin's alcoholic incompetence had been done. In territorial terms, he has tried to rectify what he sees as two major failures: the transfer of the Crimea to Ukraine and the welfare of millions of Russians whose families were settled in the southern and eastern Ukraine, particularly in the reigns of Peter I, Catherine II and Stalin's post-1945 implant of Russian speakers into territory known as 'New Russia' that he had assigned to Ukraine. Stalin planted similar minorities of Russians in Estonia, Latvia and Lithuania; which has ensured that those countries have become very keen members of NATO in order to preserve their territorial integrity. Putin's attempts to make minor revisions of Stalin's and Khrushchev's cavalier actions, at the expense of Ukraine, have placed him under sanction by the western powers, who have set their faces against all tinkering with the pattern of states that was admitted to the United Nations in 1945 and subsequently. I have drawn attention previously to the idiocy of keeping the colonial frontiers in Africa: but they are also part of the stasis that goes with the present, deeply flawed concept of sovereignty.

East Germany was allowed to vanish into West Germany, and an independent Scotland arising from due democratic process would have gained international acceptance: provided it had been set on the international stage by the United Kingdom government acting as its sponsor.

On the other hand, if the Chechens declared themselves independent of the Russian Federation, President Putin could call on the UN to help him to suppress such pretension; at least, with verbal assurances such as have been given to Spain in respect of Catalonia.

The Catalans are having an exciting game; but they need to learn from history, quickly; before hotheads start getting hurt.

Friday, 27 October 2017

JFK

The partial release of the 'secret' files relating to the killing of President John F Kennedy activated one of the most bizarre recollections that I carry. I was at the time a student, and I cannot recall any other political figure until Donald H Trump who was so well-loathed by virtually the whole of my generation as was Kennedy. He was seen as the man who had carried the world to the brink of nuclear war to intimidate the Soviet Union into withdrawing its missiles from Cuba; an occasion that produced mass rallies of students of all political opinions [and of none] in passionate protest at the threat of nuclear annihilation. He proposed that the navies of all the US allies in NATO should be merged into a 'mixed manned force' under US command. He was supporting Cuban exiles in their attempts to destroy the infant Castro regime.

When Kennedy was alive, his record was seen as at least as highly blemished as Trump's is now: though no-one denied that he had a meritorious record of service in the US Navy in the Second World War; which had caused injuries to his back that meant he was in almost-constant pain.

The president's father had allegedly made his fortune in the illicit alcohol trade during prohibition, and was reputedly the keeper of notorious actresses. These equivocal items on his record did not prevent Joe Kennedy from becoming a major supporter of Franklin Roosevelt's campaign for the Presidency, which brought him the reward of being appointed Ambassador the the Court of St James'. As US Ambassador, Joe sent Roosevelt negative messages about Britain's determination and competence to wage war. He had intended that his eldest son, Joe Junior, should in due course become US President; but when Joe was killed in the war that ambition was passed to the second son, Jack. Old Joe could not hope himself to attain such an office, in view of his highly equivocal past.

The second son, John Fitzgerald Kennedy, got his second name from his maternal grandfather, 'Honey Fitz', a man who had allegedly descended deeper into the murky side of New England life than did Joe Kennedy.

The Democratic party machine duly delivered a Senate seat for young Jack, whose marriage did nothing to limit his sexual adventurism. His run for the presidency was well funded by friends and family and it was widely believed that his election was achieved by the questionable delivery of a package of Electoral College votes by Mayor Daly of Chicago who controlled Cook County, Illinois.

As president, Kennedy utterly failed to advance the cause of emancipation for the deeply-oppressed black community in the Unites States. Emancipation and integration became a major motif of the succeeding presidency of Lyndon B Johnson, Kennedy's vice president; who had previously been seen as a political machine-man in contrast to Kennedy's heavily-marketed charisma. In foreign policy Kennedy was an aggressive cold warrior, prepared to 'bear any burden and fight any foe' in the cause of his understanding of democracy; which he usually equated with American dominance. The US allies were expected to give him blanket endorsement, and this is what most riled the young in the UK.

Immediately on the announcement of the president's death, there was a surge of jubilation: young people rejoiced that the greatest risk to peace had been removed. Over the ensuing twenty-four hours, however, a very different mood was disseminated by the media; and the Kennedy legend as it is still handed down was being established. John Fitzgerald Kennedy was a libidinous, middle-aged and significantly disabled man: by contrast, right from the day of his death, his legend was presented ruthlessly by his courtiers and disseminated by an obedient mass media; and that version was adopted by most subsequent historians. But those who remember the way in which the media succumbed to an 'official' interpretation of Kennedy's short tenure of office have retained a lifelong suspicion of how susceptible those media are, at key times, to manipulation by the state authorities in the so-say democracies.

It was soon revealed that the supposed 'climb down' by the Soviet boss, Khrushchev, in the Cuban Missile Crisis, was in fact the result of a compromise deal whereby the USA stood down planned missile silos in north-east Turkey - close to the Soviet border - as a quid pro quo for the Soviets' withdrawal of planned missile silos in Cuba, close to the United States mainland. The world then settled down to the prolongation of the cold war, and the USA became embroiled ever more deeply in the confrontation with communism that degenerated into the Vietnam war. The Europeans who had previously been coerced by Kennedy avoided direct involvement in a land war in Asia. Harold Wilson brushed off Lyndon Johnson's plea to send 'just one battalion of the Black Watch' to Vietnam, and the perceived threat of a US takeover of the British forces was removed. Australia and New Zealand did send men to Indo-China, which gained them the status of especially close US allies that they still enjoy.

Donald J Trump's 'America first' policies are reminiscent in some ways of Kennedy's. It is not easily conceivable that an assassin's bullet could make Trump a global hero; but an equally strange thing has happened; within living memory.