How British Governments Have Made Life a Misery for Millions

Academics in the University of Manchester have published data [mostly derived from well-known official data] which shows that death rates among younger people in the deprived areas of northern England have increased over the past twenty years, while in the south there has not been a similar outcome even though dangerous drugs have become more common and alcoholic abuse has continued. The difference is that more people in the north take intoxicants more prolifically than in the south, and they do this in cold homes where their bodies are less well fed than those of the majority of southerners.

As one commentator on the TV said, as she was shown with the background of a canal and a derelict factory, this was the ambiance that viewers expected to see as she summarised the Manchester data. In the course of this presentation the term 'diseases of despair' was deployed to describe the effects of depression, alcohol and drugs in a society which appears to offer no hope of a better lifestyle. The lives that are to be seen in soap operas and other apparently-commonplace programmes, seem so different from those that the inhabitants of deindustrialised backstreets as to be unattainable. Coronation Street, Victoria Square and Ambridge occasionally present a denizen with a drink, drug, psychiatric or personality problem; and such individuals appear as searing exceptions to the societal norm, that enter into the script with the approval and encouragement of the lobbies who try to highlight those problems; but after a point has been made, the problem is removed from the script, and the characters return to lives that may be far from ideal, but which are far superior to those of hundreds of thousands of the most deprived people.

I used personally to bridle at the use of the term 'deprived', whether used of the people who experience these diseases of despair or the areas where they live; but as austerity has tightened the grip of despair and disease in these places I have recognised that these areas and these people have indeed been deprived. The schools are less well equipped and the teachers are more dispirited than in 'nice' southern towns; the hospitals have less resource and the dedicated staff are less able to give time to patients when the demands on them are swollen by staff shortages; provincial public transport is cut dramatically as London contemplates Crossrail Two; across the country Libraries are closed and the entire social infrastructure is squeezed.

Today, August 9 2017, has a good claim to be the tenth anniversary of the day when it became absolutely apparent - to anyone who understood the financial world to any degree - that there was a major problem emerging from the apparent technicalities of the financial markets which would affect the real lives of everybody in the money-using economy. It took fourteen months until the 'financial crisis' [or 'credit crunch'] reached such an intensity that government action, co-ordinated with the Bank of England and the authorities in the USA and the major European markets, was unequivocally necessary. It was essential that something absolutely drastic was done was done, or the financial world as we knew it could simply cease to function.

How had this happened?

The Thatcher governments were guided by Economists who suggested that 'the market' could grow best without government interference, and that organisations like trade unions impeded the market in finding the optimum way of allocating resources through society. So the Thatcherites deliberately removed support from coal mines and shipyards, and protectionist cover for steelworks and other industries that has previously been regarded as 'essential'. Simultaneously they reduced the excessive 'rights' that had been given to the unions under Labour governments; to the extent that workers' rights were placed at a discount of almost 100%. The result was massive deindustrialisation across much of the country. The Conservatives ignored this dereliction, because the financial services were largely replacing the losses to national income that came from factory closures. The 'big bang' of 1986 set the financial institutions free to develop their own fantasy markets: just at the time when computers placed unprecedented processing capability at their disposal. Transactions could become more complex and take place much faster than had every been contemplated when unknown forces were freed.

The economy continued to grow - in terms of gross aggregate turnover - because the growing financial sector constantly found new ways of creating purchasing-power from thin air, by creating new financial devices; of which one of the most prominent was securitisation. This device enabled the 'retail' banks and building societies to lend far more money than they could have loaned if they had remained dependent on their depositors to provide them with the stock of money to be lent. Now the lenders simply lent more, then bundled the mortgages and the credit-card 'balances' into blocks or 'packages' which they sold to institutions in the new 'wholesale' financial market. Thus money could constantly be recycled through new loans; and it was considered a triumph of innovation: until it became apparent that many mortgages [starting with 'sub-prime' mortgages in the USA] would never be repaid. Concern about the security of the 'securities' escalated during 2008 as more and more of the financial 'instruments' that had been traded through the wholesale finance sector came under suspicion as having no substance behind them. Eventually the Bank of England [backed by the government] promised to buy enough 'securities' [using newly-created credit] to keep the financial sector funded with : and they created billions of pounds of 'cash' every month for several years to keep the system rolling on.

In saving that fantasy world, that had been created by a tiny fragment of the population, the real world in which most people lived had to bear the cost of the exercise. At first, it all seemed to be a technical matter; but later a conflict opened up between the demands of the financial sector and the real economy: and by then the government was so committed to saving the financial world that real people in the real world had to forced to accept lower living standards and lesser public amenities. This began slowly under the Gordon Brown government, and consequently the government rapidly expanded its borrowing to continue funding social commitments.

Then came the coalition government, in 2010. To the incoming ministers, the amount of debt that the former Labour government had been incurring was unsustainable. Month after month, as the taxation that people had paid stagnated, the government had borrowed what was necessary to keep public and social services going. Large areas of the economy - especially of the real economy - imploded and ceased to pay taxes to the state or wages to former employees [who also ceased to pay taxes when their incomes failed]. Thus the temptation to borrow yet more to compensate for the failure of the material economy was pressed upon the new government: which boldly decided that the deficit must be eradicated. So austerity became the essence of the coalition's economic policy; and mass misery was ensured. Since most of the misery was well away from Westminster politicians and civil servants could ignore the consequences of their actions. And because there was no place for humanity or reality in their model markets, the Econocracy could ignore the situation entirely.

Demography, Democracy and Drink

Demographers have several attributes in common with actuaries: they rely on estimated historical statistical data to make statements about the present structure and the future prospects of human populations and they generally adopt a group of simple central inferences to which they adhere until some disaster in real life brings ridicule on their pretensions; at which point they make a series of over-compensatory revisions to their models. The ruinous folly of British actuaries became widely apparent around 1992, when many employers who funded pension schemes for their staff had 'contributions holidays' because actuaries reckoned their schemes were 'over-funded'. On the basis of mortality tables   [summary statistics stating how long, on average, men and women lived in past generations] multiplied by the expected pensions to be payable to the members of any particular scheme on which an actuarial opinion was being given, the funds were said to have had excessive assets.

The Thatcher government decided to tax employers' payments-in to 'overfunded' pension schemes, so such firms stopped contributing even if their management was sceptical of the actuaries' argument. Then such doubts were vindicated when two fundamental errors in the actuaries' assumptions became apparent. First, the professional classes who had the highest expectations for the pensions they were due to draw had a significantly longer life expectancy than the norm for all members of schemes; and that wider group had  longer life expectancy than people who had no private pensions: so the actuarial tables understated the funding needs of schemes that included higher-paid employees. Second, after almost half a century of the National Health Service and of unprecedented developments in medical science whole populations had much longer average mortality that the tables showed. By 2002 when the 'dot-com' share bubble had collapsed, it was painfully clear that many pension schemes were seriously underfunded against the expectations of their members: and this problem extended to the actuarial expectations on which state pensions schemes had been forecast to make demands on the public purse.

This scenario was made massively worse by a decision of Chancellor Gordon Brown to tax the investment income of pension funds by some £3bn a year and by the daft notion of actuaries [lambasted elsewhere in this blog series] that pension funds' assets should predominantly be held in bonds as their maturity values were 'certain' in money-unit terms, though not at all in purchasing-power parity. The pensions awarded to retirees after 2007 were a third or less of the return for a given size of 'pension-pot' compared to 1997; and the situation has continued to worsen notably since then. Actuaries have failed in their narrow sphere of so-say expertise at least as much as have Economists who confront a massively more complex data set.

Demographers use similar techniques to predict [from the same data as actuaries are now using] that the populations of the EU and of China will have a higher proportion of pensions receivers, and a lower ratio of children and of workers to pensioners among the indigenous population, for the foreseeable future: a situation that Japan has experienced already for several years. Japan has an extremely hostile tradition to immigration, and an even deeper antipathy to allowing foreigners to aspire to Japanese citizenship; so the ageing of the population is accepted as an inexorable prospect. China's one-child-per-couple policy has been applied to the great bulk of the population, enforcing a future demographic profile similar to - and possibly ultimately more extreme than that in Japan.  Chinese demographic pressure is politically induced; in Japan the ageing trend in population began in the boom years of the nineteen-seventies and 'eighties when housing remained scarce after post-war reconstruction, largely due to idealistic restrictions that were fixed on the allocation of land for non-agricultural purposes. This had the consequence that millions of multi-generational families were cramped into small houses where large numbers of children would have been unmanageable. Couples who could afford to move away from their parental homes into tiny apartments were so stressed by the confined living space, for which they were very heavily committed financially, that the idea of having a large family was a strain too far.

Western Europe and the USA have experienced a pretty constant decline in the fertility of now-indigenous peoples [i.e. the average number of children born alive to each female] since the depression of the nineteen thirties. This trend was broken only by a short-lived breeding frenzy in English-speaking countries that was indulged by the men and women who had to a large extent been celibate for the duration of their war service. Peacetime access to socially approved sex, especially within marriage, generated a baby boom that quickly replaced the people who had been killed in the war and produced net growth of the population. In Germany and Russia, where wartime destruction had been more massive in scale and where postwar living standards were very low, the equivalent to the baby boom came much later and was much less of a peak above the half-century trend than in the USA, UK, Australia and Canada. As the baby-boomers retire from work with many of their parents still alive in their nineties, it is obvious to anybody who tots-up the published data that the reduced number of the boomers' grandchildren will be expected to support an economy that feeds, clothes, medicates, nurses and entertains a vast number of aged dependants.

The demographers assert that, despite this simple extrapolation from past experience, all is not lost for the post-industrial countries! Into Europe there is a huge influx of migrants from Asia and Africa, with millions more wanting to follow. Into the USA there is an equally vast actual and potential flow of Hispanics and lesser flows of West Indian, African and Asian immigrants; recently joined by disillusioned, well-qualified Irish and other young Europeans. The fact that these mass immigrants are culturally distinct from the indigenous populations is ignored in demographers' aggregated statistics. Demography ignores the facts that most Hispanics are Roman Catholics, brought up in the denial of 'artificial' birth control. While they are unmarried [or temporarily separated from their partners] Hispanics' rate of breeding is low; but they aspire to a North American lifestyle with large families. Recent immigrants to Europe are overwhelmingly Islamic in religion, and though they come from diverse cultures they share an increasingly assertive dogmatism that declares that Koranic Truth transcends science. They learn to recite old Arabic sentences while refusing in universities to believe teaching of evolution and the standard models of geological time. A minority of medical practitioners who enjoy high repute among religiously-diverse patients openly declare adherence to the Genesis account of the creation of humans and of the world that we inhabit. Those mores and attitudes will not change and are likely to become more prominent as the settlers gain increasing confidence.

 There is no scrap of evidence from anywhere in the Islamic world that the same pattern of an ageing population and low fertility that affect white Europeans will come to be adopted by people who cling to a totally different religious and social grounding. Demographers equate an eventual decline in fertility with the maturing of a consumer society, because the is what has happened in the post-Christian 'west'. In the last third of the twentieth century despicable Christian leaders dropped any obligation for adherents to assent to doctrines that are incompatible with modern science, while Islamists became more assertive of the primacy of religious precepts over all terrestrial interests and concepts. Meanwhile, the economic pressure on some European economies - notably, to date, Greece and Portugal and Ireland - is causing a significant percentage of young adults [many of whom have advanced qualifications] to seek migration to the Americas, to Australasia and even torformed colonies such as Angola. Forty per cent of Portuguese under the age of thirty have been reported to be actively interested in emigration;  which massively exceeds the rate of Asian and North African immigration to the European Union: if this emigration materialises a fundamental shift in the balance of the ethnicity of Europeans will become closer.

There have been, and will continue to be, cases where individual Muslims exploit what they perceive to be the institutional immorality of western society. More commonly, millions of Muslims take advantage of the secular dogma of 'human rights' to build up the numerical strength of their colonies by immigration, including the systematic importation of marriage partners under the 'right to a family life' with support from a universal benefits system. By this recruitment of mostly-young adults who have not experienced the school and street life on the host country, the cultural communities in which an increasing proportion of the Muslim population lives are able to maintain - and in some cases to introduce - the languages, customs and costumes of their ancestors. In some countries of the European Union this has become a political issue, with a defensive segment of the indigenous population becoming susceptible to the argument that 'this must be stopped before it gets too far'. This emergent movement is a challenge to democracy as it has been practised since the nineteen-forties.

European History - and even more so US History - has until recently treated European colonisation of the whole of the Americas and of Australasia as benign. Only a minority of the population of those territories yet recognises the force of the issues that are dealt with in my Fundamental Tensions [accessible from this blogsite]. A probably larger minority of the now-indigenous population are becoming susceptible to the argument that 'Muslim colonisation' of Europe, and Hispanic infiltration into the USA, are 'threats to the way of life' of the diminishing majority of the population. The improvement of the age structure of the aggregate population, which demographers present as a welcome corrective to the rising infertility and longevity of the majority population, may become very differently perceived when the different lifestyles of a declining European population and a growing cohort of Muslims delivers an increasing Muslim majority in the schools system. At that point, the secularist core curriculum and - in particular - conventional science teaching will be challenged; which can become a threat to innovation and to economic development. At the extreme, one can see a possibility of a rapidly-growing population that is in denial about crucial areas of medical understanding and scientific principle.

Democracy is ill-equipped to deal with these issues: which may come to matter more to the electorate than the 'distributive justice' that has characterised democratic statecraft since the nineteen-thirties.

Where does Drink come into this picture? Good Muslims do not take alcohol. Drinking alcohol - beer and wines and spirits - is integral to European tradition. In Russia and Scotland, with some urban areas of Scandinavia and Canada, as well as among indigenous Australians, Inuit and tribally-segregated indigenous Americans, alcohol is a recognised source both of crime and of high mortality: especially, but not exclusively, among men. Alcohol often combines with drugtaking to create an a-social and semi-criminal 'underclass' to which mentally ill and disturbed and depressed people can easily descend. In every town and city in the post-industrial world indigenous children fleeing from broken and abusive homes are especially vulnerable, as are adults whose home lives and self-respect collapse under the depression of unemployment. Everybody has had access to these facts, which have been blazoned in all the media for at least a couple of decades, and still the problems are seen as intractible: especially while lawyers can draw fees or stipends from the state 'for protecting the human rights' of such people. Once they have descended to an abject condition they are held to have the right to stay there, if they ask to be let alone to get on with their self-destruction.

A concerned medical lobby is demanding that the price of alcohol should be raised; defying the fact that higher prices would force victims of the downward spiral into accepting more risky propositions as prostitutes and undertaking more crimes to feed their habits; as occurs when black-market drug prices are increased.

As Muslim communities grow and become more distinct from the European host population in dress and behaviour, they become more confident of the moral superiority of their lifestyle and of the religion that drives it. Secularism has taken Europe into a very dangerous place, which the present Pope is eager to address: it is not yet perceptible that his target audience is listening. The USA retains a public religiosity that defies the constitutional separation of church from the state, and so has much less of a stench of decay than pervades European society. But the certainties that gave the allies their strength in the second world war and through much of the cold war have been eroded with remarkable speed and comprehensiveness. The consequences will come home to roost: suddenly and without warning