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Thursday, 20 April 2017

Bill Gates, British Reality and George Osborne

Bill Gates of Microsoft, usually described as 'one of the richest men in the world' after giving billions of dollars to good causes, was in London yesterday. In a set speech, he said that if Britain decides to reduce its foreign aid budget, people will die who would not die if the aid had been continued. That statement can be taken at face value, in respect of the unknowable proportion of the aid budget that gets through the web of exploitative contractors and venial bureaucrats and actually gets to where it is needed. If the total DfID budget was reduced, and the leakage from the system was reduced also, the same amount of good could be done for less.

Meanwhile, within the United Kingdom, lives are being lost and curtailed by the combined impact of actual cuts and of underfunding in the National Health Service. As long as the total expenditure of government is limited [as it always must be] some of the choices that parliament makes, under tutelage of the government, will result is some people being relatively advantaged to the cost of others.

The British economy, and its tolerance of taxation and other tolls taken by the government, are not large enough to fund all the good causes that the most beneficent citizens might be willing collectively to finance in an ideal world. I have repeatedly pointed out, that supposed 'economic growth' is no guide at all to the health of the system. 'Growth' merely records the notional amount of money that was turned over in one year [or month, or day] within the whole economy, compared to a previous period of the same length. Therefore 'strong growth' can be reported by an economy where more and more spending in successive periods is financed by consumers' borrowing to buy imported goods. If such an economy also sells control of its businesses to foreigners, who thereafter draw some or all of those firms' profits into their foreign bank accounts, the funds available to expand and to maintain the resources for production within the economy are reduced. So in successive years the balance of payments deficit increases, putting still more resources into foreign hands to be used for lending to the government [which thereafter will have to pay interest to the foreign holders of government debt], and into foreign hands to buy more indigenous companies. Far from being strengthened by a relatively high rate of 'growth', compared to other countries' data, an economy can massively be weakened as it appears to be 'growing strongly'.

This explains the apparent paradox by which George Osborne could spend his six years as Chancellor of the Exchequer boasting about the economy 'growing' more quickly than most others among the once-industrial countries, while he demanded cuts in real-terms government expenditure on all fronts. He talked a lot about 'inward investment', which meant the sale of assets to aliens. He talked about a 'march of the makers' [expansion of material production] that never happened. He deplored the low rate of 'productivity' in the system - the calculated average output of workers in various sectors of the economy, set against the cost of employing them - but he did nothing about it. As Britain's material output declined, thousands of 'zombie companies' remained in existence, with disastrously low productivity, simply so that banks that had lent money to them did not have to foreclose on the debt and thus increase the total of losses that the banking sector had to report; while this chicanery kept a lot of non-viable jobs in the employment statistics. As Osborne's policies made the country poorer and nastier, he retained the air of a master of the universe.

The announcement of a General Election yesterday was followed by the news that Osborne would stand down from parliament. This was the trigger for interviews in which his indefeasible complacency and self-satisfaction were unabashed. His successor at the Treasury has followed his policies, and will do so if he remains in office after the election. That means that government cuts will continue as the weakness of the economy becomes more apparent: thus the government's choices between British and foreign deaths will be more apparent. The deaths will continue to be chargeable to HM Government.

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