Newsnotes 2015 06

Notes On The News

by Gwydion M Williams


Government by the 37%, for the 1%

Ed Miliband’s weak leftist approach gained Labour a million votes in England, as compared to 2010.  It was much better than New Labour without Tony Blair. And Blair was the key to the success of the ‘New Labour’ brand.  He was brilliant at selling himself as a good and sensible leader to the relatively ignorant.

To be exact, Labour got just over eight million English votes in 2015: it was just over seven million in 2010.[1]  Labour also lost more than 300,000 votes in Scotland, where being seen as left of Labour didn’t stop the Scottish Nationalists making a remarkable advance.

Overall, the UK total for Labour went up by 734,801.  But since UK unity is on its last legs, while Wales is small and divided, England is the crucial battleground.

If Labour opts for Blairism without Blair, this is likely to be a flop. The bulk of the electorate didn’t vote for Toryism: even in England they got 41%, up from 39.6% in 2010.[2]  Their huge gain in seats came from nearly four million electors rejecting the Liberal Democrats.

Tory-Lite as practiced by the Liberal Democrats in the 2010-2015 Coalition was an unpopular brand. Voters who think that austerity and privatisation are the right things to do, prefer to vote for the party that solidly believes in such things. A party that only half believes and is seen to be trying to feed the electors whatever line will get them elected is likely to end up despised by both sides. That has been the fate of the Moderate Socialists in Greece, and the same may be beginning to happen in Spain. And it happened very decisively in Scotland, where the SNP was happy to be seen as left of Labour, even if perhaps they were not as left as they seemed.  Labour is protected by an electoral system that makes life tough for small parties, but the Greens are rising and UKIP rose from small beginnings despite a lot of political blunders.

The peculiarities of a First Past the Post voting system has also given the Tory Party a clear majority of seats with just under 37% of the voters.[3]  Things might be very different if the Liberal Democrats in 2010 had demanded Proportional Representation as a price for letting the Tories back into government. As things were, the voters rejected a suggested reform by a margin of about two to one. Two to one is also the proportion of voters for either Labour or Tory at a typical election: voters who want one party to definitely rule. The Liberal-Democrats might have asserted the rights of the one-third who typically back minor parties: rights for this minority. Instead they opted for a deal that has been utterly disastrous for their party. (Though rather good for the careers of individuals who served as ministers, one can’t help noticing.)

As is detailed elsewhere in this magazine, it was a massive collapse by the Liberal-Democrats in England that gave the Tories their majority. Voters who found Tory-Lite unacceptable have given us five more years of Toryism. But Labour should be taunting the Tories with being the choice of a mere 37%, rather than accepting the chant from the right-wing media that Toryism was the choice of an electorate scared of ‘Red Ed’.

Labour was much too timid, keeping a lot of the New Labour assumption that Thatcherism was more or less right and you only want to soften it a little. But people in a time of crisis do not want soft policies. They correctly feel that some sort of decisive action is needed to set things right.  Labour needed to say that Cameron’s brand of Thatcherism was causing needless pain for very little gain.

Note also that Cameron, like Blair, has been good at projecting himself as safe and sensible to voters with few solid beliefs. But he’s also promised to step down before the next election. His most likely and effective replacement would be Boris Johnson – but he could be targeted as representing just the interests of an elitist ‘Upper London’ and not caring about the rest of us.

The Tories are committed to enormous cuts in public spending.  So far they have avoiding making unpopular choices as to where the cuts will fall. But that game can’t go on for long.


Labour’s Big Blunder over Europe.

Back in March 2015, I said

Labour’s best response [to the rise of UKIP and Cameron’s promise of a referendum on Europe] would be to say that with so many people wanting a referendum, it would be sensible to settle the issue for another generation or two.  Another 2-to-1 victory would destroy both UKIP and the broad Euroskeptic movement, and politics could move on.”

I was also expecting the narrow Labour victory that the polls predicted – I am a reasoner rather than a prophet.  But the UKIP vote is a vote of general discontent that includes a desire for the ‘good old days’ that people think we had before joining the European Community. (And which included low unemployment.) Those voters will remain discontent if the vote once again keeps Britain in Europe, which is highly probable. A lot of them came from Labour and may go back to Labour.  Or perhaps to some new party to the left of Labour, if Labour chooses to scorn the Trade Unions and elect a hard-line Blairite.

Labour needs to start saying that it has a past to be proud of.  Labour established the Mixed Economy as the norm for Britain, and this helped win the Cold War.  Reagan and Thatcher promised a return to Classical Capitalism, but they have not delivered.  Life for small businesses has probably got harder.  Tax-and-spend remains the norm, just modified to tax-and-spend via subcontracting to heavily subsidised profit-making corporations.  Many of them publicly owned, just not owned by the British public.  State-owned corporations from the rest of Europe have picked up huge chunks of British infrastructure.

Labour also wound up the British Empire, despite some pointless rear-guard actions by the Tories.  These included a bizarre conspiracy followed by a humiliating climb-down in the Suez Crisis.  Also a war in Kenya in which British troops committed atrocities.

Labour should hit back at propaganda about ‘welfare scroungers’.  Point out that this is a tiny fraction of the whole.  That most people who have a period of dependence on welfare will also bounce back and get back to work soon enough.  And that changes sold to the public as being against fraud have mostly functioned by taking a mean-spirited view of people with genuine needs that they report honestly.

The next Labour leader should also say a lot about the false nature of the promised capitalist restoration.  Remind everyone that a Mixed Economy with a large state sector and many state regulations remains the global norm, including in the USA.  Note that Chinese “capitalism” is much more state-run than the West ever was.

The New Right view of 20th century history is based on moving the definitions of “capitalist” and “socialist” in order to claim all economic success is capitalist.  If you strung their views together into a coherent narrative, it might run as follows:

  • Capitalism, expanding from its original base in Britain, was liberating humanity up until 1914, when it suffered from an inexplicable outbreak of Trench Warfare.
  • It bounced back, but then a fairly normal economic slump at the end of the 1920s caused unjustified panic and capitalism was in the 1930s replaced by capitalism.
  • After World War Two, in excessive admiration for the Soviet Union after it had merely saved the West from Nazism, there were still more drastic changes and capitalism was replaced by capitalism.
  • But in the 1980s, Thatcher and Reagan rescued us by replacing capitalism with capitalism. Of course there is still much more that needs to be done to replace capitalism with capitalism in the West.
  • China, while owing all of its successes to capitalism, faces all sorts of disasters unless it urgently replaces capitalism with capitalism.

Labour should also remind everyone of the main actual success of Reagan and Thatcher – shifting the financial burdens away from the rich and onto the working mainstream.  Taxes have not gone down for most people, but for the rich these years have been a bonanza.  But it’s happened without any genuine boost to economic growth.

Weakened Trade Unions drag down the pay for all ordinary people, including those who would never consider joining a Trade Union.  In the real world, as distinct from the fantasies of economic textbooks, economics is heavily dependent on political power.  In the 1970s they did use power foolishly, but that had ended even before the disastrous Miners Strike.


Does the Public Care?

In an election that was expected to be very close, just under two thirds of the electorate voted.  66.2%, to be exact. 65.1% in 2010, 61.4% in 2005, 59.4% in 2001, 71.3% in 1997 and 77.67% in 1992. Turnouts over 70% for General Elections used to be normal, peaking at over 80% in 1950 and 1951.[4]

You find increasing number of people who don’t vote.  Some of these are then surprised that politicians ignore them.  But many of them are ignorant enough to believe it makes no difference.

Older people are much more likely to vote than the young.  Pensioners have been looked after.  Young people are left jobless and neglected.  That’s been the Tory strategy, and so far it has worked.

Another Tory strategy has been to acquire more ethnic-minority votes.  This too has been working.  The total Ethnic Minority vote for Labour has been shrinking: in 1997 it was 82%.  For 2010 it was 62% and 52% in 2015.[5]  Unsurprisingly, Black voters are more pro-Labour than Asians, but both show a consistent trend towards Tories getting more support.  As they get more settled and prosperous, they are less likely to see Labour as ‘their party’.

As I said last month, General Elections don’t put ordinary people in charge.  You just get a bunch of Elected Oligarchs, for whom the wishes of the majority is just one factor among many to be considered in their political career.  Many come from elite backgrounds and have hopes of climbing higher without this elite:

“Almost a third (32%) of MPs in the new House of Commons went to private school, according to an analysis by an education charity.

“Of these, almost one in 10 went to Eton, suggests the Sutton Trust study.

“Among Conservative MPs, nearly half (48%) were privately educated, the report indicates…

“Among Labour MPs, some 17% went to private schools, among Liberal Democrats the figure was 14%.

“The figure was far lower among Scottish Nationalist Party MPs, at just 5%.”[6]

Does the public care?  Short-sighted left-wing ranting about the faults of the pre-Thatcher system did much to make people stop caring.  To forget about how much had been done successfully.

Labour as usual faced a press that is much more right-wing than the electorate:

“We know that Britain’s best-selling national daily [the Sun], in company with the Daily Mail, Daily Express and Daily Telegraph, consistently ran virulent anti-Labour material during the weeks of the campaign.

“We also know that, based on newsprint sales, 57.5% of the dailies backed the Tories while 11.7 % backed Labour and, on the same metric, 66% of the Sunday nationals urged their readers to vote Conservative.”[7]

People still vote left despite this bias, but perhaps fewer than if the press merely expressed opinions and didn’t run scare stories.  Comparing the opinion polls to the votes, it seems that a crucial 3% planned to vote Labour but in the end did not.  And another 3%, probably not the same people, voted Tory even though they had planned to vote otherwise. It was these relatively small shifts that have given the Tories an absolute majority, when the polls forecast a close-run election in which either party could have formed a government.  The ‘fear factor’ generated by the media made the difference.


Goodbye, Great Britain: Hello, Little England?

The phrase ‘Little England’ was around before Thatcher.  But then it would have indicated a cosy and un-ambitious place, something like the Dutch and Scandinavians actually are.  Now it would be a stressed and unhappy Little England, a background for London’s role as a global city.  Upper London rules OK?

Before the election,  Boris Johnson said in the Evening Standard that London’s global role was at risk:

“When I became Mayor the number one priority was to protect Londoners from a catastrophic recession and to keep them in jobs. And I remember how the spendthrift policies of the last Labour government helped to deepen that recession.

“In the space of a few months we saw 190,000 Londoners thrown out of work. We saw tens of thousands of good businesses go to the wall.

“And there were so-called experts who said this place was finished and that all the wealth and power was going to Shanghai, Mumbai, Dubai — and bye bye London, they said. They said the British capital would never recover its standing as the greatest city on earth.”[8]

He doesn’t mention that the recession that began in 2008 was triggered by a massive financial crisis in the USA.  Or that the root cause was massive gambling, helped by deregulation that the London financial markets pioneered under Thatcher.

If the 1960s option of a Little England had been taken, London would not be a global capital, but most Londoners would have been better off.  Most Britons inside or outside of England might have been just as prosperous and rather less stressed, as in Scandinavia, Holland or Belgium.  Boris Johnson represents Upper London, a rich elite who flourish at the expense of the rest of us.  People who would have to diminish or migrate if Britain became a more balanced and happy place that no longer tried to rule the rest of the world.

What we could now get is a very different Little England, a shrunken and withered body with Upper London as its arrogant and flourishing head.  And even that might not last.  Shanghai and Mumbai are key hubs in two vast nation-states: Shanghai for China’s vast industrial production and Mumbai (Bombay) for India’s rising mix of industry and services.  Dubai is a hub for a collection of mostly-tiny Arab states with vast oil reserves.  London was made great by Britain’s Industrial Revolution, but British manufactures have long been in decline and Thatcherism made the decline much worse.  So London’s continuing importance will be uncertain, regardless of which party forms the government.

Note also that Cameron has alienated both Scotland and potential right-wing allies in Continental Europe.  The European Right is now much more suspicious of Britain, seeing the Tory leadership as irresponsible.  They are much closer to being functional conservatives than the Tory Party is ever likely to be.  The brief return to something like functional conservatism under John Major did not stick and ‘romantic Toryism’ is definitely dead and gone.

It is now almost certain that Scotland will be lost.  Union in 1707 was a key element in the rise of the British Empire: the end of the Union will be another milestone in British decline.  Not that the leading Tories seem to know it: Cameron comes from a family that abandoned Scotland in favour of upper-class England and he may see the place as a nuisance that England would be much better off without.  He could hardly say this openly, but seems intent on passing legislation that would shut out Scotland from English legislation, ignoring the need for concessions to a much smaller nation if Scotland is to find it worthwhile to stay within the United Kingdom.  Worse, he has appointed the highly-unpopular Andrew Dunlop as Minister for Scotland: the man would be better viewed as the Minister for Saying Goodbye to Scotland.[9]

He is also likely to fail to change Europe.  As I said earlier, Labour was foolish not to agree to another referendum, when the rise of UKIP made it clear there was a lot of discontent.  Cameron helped limit the UKIP advance by promising a vote after attempts at ‘reform’ – these ‘reforms’ being largely a return to 19th century values that Tories view as superior.  The sensible Continental-European answer would be to question whether Mr Cameron can reform Europe when he can’t really manage the ‘United Kingdom of Great Britain and Northern Ireland’.  When increasingly his party is an English party that has undermined whatever historic unity there was

Cameron’s Tories got 41% of the votes in England and just over 27% in Wales. A feeble attempt at Northern Ireland Toryism to bridge the Catholic-Protestant split got under 10,000 votes, with a clear majority going to the DUP which has never had any Catholic members.  Followed closely by Sinn Fein which has some Protestant members and candidates but refuses to take part in Westminster politics.  And Cameron has lost Scotland, where exactly half the voters voted Scottish Nationalist and his party got less than 15% of the votes.[10]


Football: Bring Me the Head of Sepp Blatter

People keep falling for a very simple trick.  News media dominated by a small number of rich right-wing characters will suddenly turn the spotlights on a few selected individuals in a social setting that has long been corrupt.  The public are led to believe that removing these individuals will make things better.  In reality, the corruption will continue and the spotlighted individuals were picked on for some completely different reason.

It was done extensively after the Soviet collapse.  Italy’s Christian Democrats were destroyed while corruption continued.  Germany’s Christian Democrats were damaged and under Angela Merkel are much more friendly to the Anglosphere than might otherwise have been the case.  Several dictators previously protected as allies were lined up for destruction, and mostly destroyed or pushed into oblivion.  Suharto in Indonesia, Mobutu in Zaire (Congo), Ceausescu in Romania.  Saddam Hussein in Iraq was also on the list, pressured over debts that he had run up during his war against Iran, from which the USA had earlier secured him a safe exit after his blatant aggression against Iran had failed and he looked likely to suffer a drastic defeat.  The Iraqi government had also been gassing its Kurdish rebels for decades without significant Western protests: George Galloway was one of the few who tried to raise the issue in the days before Iraq’s invasion of Kuwait.  Only when Saddam was targeted by the West and became an unexpected standard-bearer for Secular Arab Nationalism did Galloway switch to defending him as someone much better than the likely replacements.

Note that the reality of Anglosphere power is nothing like the sinister authoritarian conspiracy that one is warned about at sites like the Information Clearing House.[11]  A sinister authoritarian conspiracy by Western plutocrats would have known that it was worth spending a few trillion to keep Russia as a loyal ally and useful enforcer for global interventions.  Instead the West encouraged Yeltsin to get confrontational with his Parliament, at that time led by a Chechen called Ruslan Khasbulatov who was right on two vital points: Chechens had no future except as part of the Russian Republic and Yeltsin was heading in a ruinous direction.  The result was the 1993 Russian constitutional crisis, which gave Yeltsin the overwhelming power that the West now bitches about after it has passed to Putin.  Western advice created a class of largely parasitic oligarchs and helped shrink the economy rather than boosting it, so that the West lost most of its friends.  But rather than admit error, the dominant element in the USA decided that the Russians had mishandled the matter.  If they could be in complete control, as in Iraq, then they could indeed reshape the society according to their superior wisdom.

Anglosphere politics have been bungled because it’s been made dangerous to tell unpleasant truths.  You usually don’t get jailed for it, but you do get marginalised, pushed out of the ‘charmed circle’ of those who get listened to and given attractive fees for telling the rich what the rich want to hear.  The massive failure of the attempt to reshape Iraq has not harmed the careers of those who gave welcome but foolish advice.  Nor restored those who took the risk of telling the truth as they saw it.  And the lesson has been learned very nicely by now.  Within the framework of the New Right / Coolheart world, the people who should be telling unpleasant truths know that they do better by being evasive or dishonest.  The long-term cost of lying is someone else’s problem.

In the much smaller world of International Football, the issue is the Anglo hegemony and the elected FIFA leadership disrespecting it.  There seem to have been two issues.  One was the sites chosen for future World Cups:

“Blatter, in the Swiss interview, noted that the US had lost the 2022 World Cup to Qatar, and England, another major critic, lost the 2018 World Cup to Russia. He said the US was the ‘number one sponsor’ of Jordan, home of his unsuccessful challenger for the Fifa presidency, Prince Ali bin al-Hussein.

“Blatter also hit out at the Uefa president, Michel Platini, who had called for his resignation over the corruption scandals. ‘It is a hate that comes not just from a person at Uefa,’ he said, ‘it comes from the Uefa organisation that cannot understand that in 1998 I became president.'”[12]  (Uefa is the European football association.)

“Like his presidential predecessor Havelange, Blatter has sought to increase the influence of African and Asian countries in world football through the expansion of participating teams in various FIFA tournaments, yet has persistently been dogged by claims of corruption and financial mismanagement. Blatter’s reign has overseen a vast expansion in revenues generated by the FIFA World Cup accompanied by the collapse of the marketing company International Sport and Leisure and numerous allegations of corruption in the bidding processes for the awarding of FIFA tournaments.”[13]

FIFA was founded as a European association, with the first Presidents coming from France, England and Belgium.  Two Presidents from England ran it from 1955 to 1974.  But membership became global, and in 1974 they elected a Brazilian, João Havelange, who was replaced in 1998 by Blatter.  Football became globalised, and also corrupt, but it is a big-money game and corruption is just what you’d expect.  Not many people are honest enough to resist temptation when people are raking in the cash all around them.

Blatter is being accused because of ‘corrupt FIFA officials’ who now face specific charges.  The implication is that these are people he chose.  But I looked at the list[14], and these seemed to be people from various individual components of FIFA.  People he had no choice but to work with if he was get anything done.  One leading figure is Jeffrey Webb, born in the USA but is now based in the Cayman Islands.[15]  The place is notorious as a haven for dirty money: but also it is one of fourteen British Overseas Territories surviving from the Empire: territories under the jurisdiction and sovereignty of the United Kingdom but which do not form part of it.  Globalised niches whose main function is to allow the rich to legally avoid paying their fair share of taxes: but all sorts of other deals can happen there.

Blatter was an elected official.  He had to work with other elected officials representing various national interests: people he did not appoint and cannot dismiss, in most cases.  So it’s far from obvious he was to blame for corrupt dealings by these people – which in any case have got no further than an indictment.  US prosecutors are notorious for arranging for high-profile indictments for people who are later found innocent when the matter comes to trial.  Or indictments that fizzle out with no evidence ever presented for public scrutiny.  The attempt to use the matter to get rid of Blatter was absurd and was quite rightly rejected by his long-standing supporters in Africa and Asia.  He is credited with helping spread football around the world, holding the first world cup in Asia (Japan plus South Korea) and Africa (South Africa).

The other matter concerned Palestine footballers who have what seemed like valid complaints about Israel.  This has now been defused:

“The Palestinian Football Association has withdrawn its call to have Israel suspended from Fifa in a chaotic last minute climbdown at the congress of football’s governing body in Zurich. Following days of negotiations, and the mediation of Fifa president Sepp Blatter, the Palestinian moves at the scandal-ridden congress appeared comprehensively outmanoeuvred by feverish Israeli lobbying and the opposition of senior Fifa officials, including Blatter.

“As details of an impending deal emerged, the Palestinian delegation came out of the last round of talks expecting the congress to vote on an amendment to refer the main sticking point, the status of five Israeli clubs based in illegal settlements on the West Bank, to the United Nations.

“But the Palestinian move was overruled by Blatter, to the clear dismay of the Palestinian delegation, whose lawyer tried to appeal from the floor. Instead, the issue will be referred to a new Fifa committee.”[16]

Blatter was good for world football, channelling vast sums to needy countries, so he was initially retained by a FIFA vote.  He compromised over the Palestinian complaints, upholding the normal rule that Israel is above the law.  But the whole money-dominated system was vulnerable to its sponsors.  Visa, Coca-Cola and McDonald’s led the pressure that sponsorship money might be withdrawn, and Blatter caved in by resigning.[17]

At the time of writing (3rd June), no one is quite sure what will happen next.  A smart solution would be for the sponsors to push for a replacement from outside of Europe but obedient to Anglosphere interests.  Maybe someone from Africa.  And in a few years time, we will get the ‘surprising’ news that corruption was not fixed by the new regime, as with Berlusconi in Italy.


How Football Is Poisoned By Money

Football has been turning into a big-money sport since the 1950s.  The initiative came from Europe, though it is also very similar to what happened in sport in the USA, for their distinctive US sports.

For soccer, it was remarkable when a gifted Welsh player called John Charles signed for Juventus of Turin around 1958 for £65,000 from Leeds United.[18]  In today’s money, £65,000 in 1958 would be more than a million and perhaps as much as five million, depending on whether you use purchasing power, relative incomes or some other system.[19]  Still a lot less than current fees, with 85 million the current record and fifty million not exceptional.[20]

Football was also a more civilised game in those days.  The Wiki entry for John Charles says:

“William John Charles, CBE (27 December 1931 – 21 February 2004) was a Welsh international footballer who played for Leeds United and Juventus. Rated by many as the greatest all-round footballer ever to come from Britain, he was equally adept at centre-forward or centre-back. Due to his height, physique, and strength, he excelled in the air, although he was also a prolific goalscorer with his feet, due to his powerful and accurate shot. Despite his size, he was also a fast player, who was gifted with good technical ability and passing ability, which allowed him both to score and create goals. He has since been included in the Football League 100 Legends and was inducted into the Football Hall of Fame.

“He was never cautioned or sent off during his entire career, due to his philosophy of never kicking or intentionally hurting opposing players. Standing at 6 feet 2 inches, he was nicknamed Il Gigante Buono – The Gentle Giant.”[21]

Football since then has seen the rise of the Professional Foul: players doing anything to win and football managers letting it happen, and often encouraging it.  And this is strongly connected with the vast sums of money that players may make if they succeed, by fair means or foul.

In John Charles’ day, wages for professional footballers were not extraordinary.  Some players good enough to turn professional and play in one of the higher leagues preferred to stick to regular skilled working-class jobs.  Now it has lost all connection with them:

“As the money involved in football increases, so does each individual player’s salary. According to a study, a player at one of the top-flight teams in England earns £1.5 million a year. This compares to the £646,000 of six seasons ago.

“The disparities of finance between the top division and lower league teams are still very obvious:

“New figures show that:

  • “Average Premier League wages have reached £22,353 a week – before lucrative bonuses – or £1.16million a year.
  • “Average Championship earnings are £4,059 a week (£211,068 a year), less than a fifth of players one division above.
  • “In the bottom division, League Two, their weekly pay of £747 is not much more than the national average.
  • “League Two earnings are also 30 times smaller than those in the Premier League.”[22]

(For those unfamiliar with English football, the older and very logical Divisions One through Four have been replaced by Premier, Championship, a third tier now called Division One and a fourth tier now called Division Two.)

Globally, England’s Premier League is the world leader in terms of cash.  The average club income in England’s Premier League is 155 million.[23]  Players have incomes of more than two million a year in 2014.  Player incomes also average more than a million in the top leagues in Germany, Italy and Spain.  Then come Russia and France, with salaries of a mere 900K, and then a big drop down to the top league in Brazil, with average salaries of little more than half a million.

A key event was the removal in 1961 of the Maximum Wage for English football league players.

“The average footballer’s wage in England’s top division has climbed from £20 per week in 1961 to £33,868 per week or thereabouts 50 years later. [2011.]  This week marks half a century since the abolition of the maximum wage in English football.”[24]

In 2011, the relative value of £20 from 1961 was something between £353.80 and £1,165.00. [25]  That’s still nearly 30 times as great.  The players had demanded it, but would have been wiser  to have raised the ceiling rather than making it ‘every man for himself’.  Football stopped being a game and evolved into a complex entertainment industry with millions at stake.  Obviously there was a lot of corruption.

The attack on Blatter was purely an attack on Blatter.  None of his critics are suggesting doing anything at all about the major distortions in the game.  I’ve seen a few outsider protests over the years, mostly written by hard-core fans of particular teams and not really addressing the mass of the moderately interested.  A detailed study of the whole matter could be usefully done by someone with a lot more knowledge of and interest in soccer than myself.


India – Modi Remains a Hindu Nationalist

Deregulation was a favourite fix even before Thatcher, as with the removal of the cap on football wages in 1961.  Another was Resale Price Maintenance, systems whereby a manufacturer and its distributors agree to limits on the price offered to the general public.  This was largely abolished in 1964 in Britain, and has had the long-term result of allowing supermarkets to put small shops out of business.  Books were a late hold-out, with the Net Book Agreement preventing price-cutting for books until the 1990s in the UK.  Naturally this has put a lot of small bookshops out of business.  Even some large chains or large bookshops have been driven out of business or taken over.

Globally, deregulation has produced extremes.  It has also not been a source of genuine economic improvement.  I’ve detailed elsewhere how the policies of Thatcher and Reagan failed to boost average rates of growth in the UK or USA, while actually damaging the growth of the ‘miracle economies’ of Japan, West Germany, France and Italy, the main contributors to the West’s Cold War victory.  But deregulation does produce huge extra incomes for a small number of lucky winners.  Via advertising and ownership, these lucky winners dominate the media and spread the impression of vast success for the new system.  Often they fool the voters, as they did in the recent British General Election.

In India, the Hindu Nationalists led by Narendra Modi were expected to be part of it.  But a year after their decisive election victory, it seems he is being careful:

“He needs to use markets as agents of change. Mr Modi should lead a national campaign to ease the world’s worst labour laws. Perverse restrictions on domestic trade in farm produce should go. Private companies could compete to make the railways more efficient. Infrastructure must be built faster, which requires a better law on acquiring land. State-run banks should no longer be subject to political meddling, but recapitalised and put in independent, ideally private, hands.”[26]

All of these things when applied in Europe and the USA have delivered huge amounts of money to the rich, but not altered the general growth and improvement of the economy.  In India there is the additional danger of splitting a complex and diverse subcontinent, if local interests are not respected.

Mr Modi is based mostly in North India and among relative hard-liners among Hindus.  He is perhaps aware of the dangers, and has no wish to go down in history as the man who destroyed the Republic of India.


Iraq – Towards Failed-State Status

“The Iraqi army is struggling to deal with attacks from Islamic State fighters, despite heavily outnumbering them, because it lacks ‘moral cohesion’ and effective leadership, according to the most senior British officer to be involved in postwar planning in Iraq.

“Maj Gen Tim Cross echoed comments by the US defence secretary that successive gains by Isis militants in the region were because the Iraqi army did not have the ‘will to fight’.

“Speaking to the BBC’s Today programme, Cross said: ‘It’s interesting that the secretary used that [will to fight] expression because we use that expression in the British army and our argument is that it’s about a moral cohesion in your army.

“‘It’s about the motivation to achieve what it is you’re setting out to achieve and it’s about effective leadership … and it’s this will to fight that I think is fundamentally at the heart of the issue with the Iraqi military.

“‘There’s no cohesion, there’s no strong leadership,’ he said. ‘They’re really struggling and I don’t think there’s any doubt about that.’

“Iraqi forces outnumbered their opposition in Ramadi, the capital of Anbar province, last weekend but withdrew, leaving behind large numbers of US-supplied vehicles, including several tanks.”[27]

It has also been claimed that the Ramadi forces were neglected by Baghdad.[28]  Whatever, it is clear that the diverse elements that Britain bundled together out of three provinces of the Ottoman Empire have no inherent coherence.  Saddam’s regime was no more brutal than the process that stamped coherence on Great Britain: the Tudor and Stuart monarchs plus Oliver Cromwell.  Saddam’s regime also made a country that was safe for those who didn’t question his right to rule, with tolerance for a great diversity of religious belief.  All that has ended now.  Elections are won by the Religious Shia and Shia Militia are the most effective force on the side of the government.  At the time of writing (2nd June), they are seeking to recapture Ramadi.  They may succeed, as they earlier succeeded at Tikrit.  But what is clear is that US and British efforts at state-building have failed utterly.  Shia run a Shia rump with little place for anyone else.  The rest is fragmented with Sunni extremism the most viable option among Arabs.


USA – Olympus Has Fallen!

Olympus Has Fallen!  Or almost.  It seems a majority of US citizens now want the government to redistribute wealth:

“Americans are eager to see the government ‘spread the wealth around’ through heavy taxes on rich people. This, according to Gallup, is a relatively new phenomenon, with a clear preference for soaking the rich really only emerging in the past four or five years…

“At least since the mid-1980s a large majority of Americans have expressed a preference for a flatter distribution of income. But that’s something that could, at least hypothetically, be achieved in a whole variety of ways…

“Respondents ages 18 to 34 are supportive of redistributive taxation by a 59-38 margin, while those over 55 are much more skeptical — 47 percent say tax the rich, and 50 percent disagree. In other words, the age stratification of American politics isn’t just about gay marriage or marijuana; it cuts to the core economic policy divides in Washington and state capitals around the country.”[29]

What’s curious is that only a minority wanted it during the era when it was actually happening, according to a chart showing historic shifts in viewpoint.[30]  I suppose a key factor is the morbid suspicion of government that always existed, but was greatly strengthened by 1960s radicalism.  And a failure by radicals to say that a fair amount of wealth redistribution had already happened.

Still, though it has not yet been properly reflected in US politics, a shift has to happen sooner or later.  It goes along with the decline of mainstream Protestantism, which often supported the highly un-Christian view that inequalities of wealth were a sign of blessedness among the respectable rich.

“The number of Americans who identify as Christian has fallen nearly eight percentage points in only seven years, according to a new survey.

“Pew Research Center found that 71% of Americans identified as Christian in 2014 – down from 78% in 2007.

“In the same period, Americans identifying as having no religion grew from 16% to 23%.

“Fifty-six million Americans do not observe any religion, the second largest community after Evangelicals.”[31]

If the US shifts, the rest of the world is going to shift vastly more, since the USA was always the stronghold of such beliefs.  The Olympus of Greed, now being undermined as its own people shift to different beliefs.

Incidentally, ‘Olympus Has Fallen’ is the title of a rather silly US thriller film about a terrorist attack on the White House.  In which trained gunmen on both sides stand in clear view and make it convenient for the enemy to shoot them, ignoring nearby cover.  Most action-adventure films have both sides blunder to allow a crucial or even all-powerful role to the Maverick Hero, but this film is more contrived than most.  (The Die Hard series did show some ingenuity in making the various events plausible.)

Such improbable visions are part of what’s wrong with the USA.  But hopefully all this is now winding down.


China: Escaping the Middle Income Trap

The influential British magazine Prospect is becoming despairing about China’s new leader Xi Jinping.  Despairing for reasons that make me increasingly hopeful for China’s future.

“Just over two years since Xi formally took power, his moves to consolidate state control have confounded all those who thought that, as the son of a renowned liberal, he would continue the steady liberalisation of the past 30 years. He was only 59 when he became President, relatively young for a Chinese leader; surely, many thought, his values would have been shaped too by China’s increasing openness to the world during his adult years?

“But like Mao, he has made the preservation of the power of the Communist Party his overriding goal. His motive appears partly to be to counter the growing demands of the new, large middle class, created by China’s recent transformation. In doing so, however, Xi runs the risk of reversing many of the extraordinary advances that China has made since the reforms introduced in the late 1970s and early 1980s by Mao’s successor, Deng Xiaoping, the leader who opened up China to the rest of the world.”

Deng’s policy was actually ‘some must get rich first.  He copied the successful systems of Japan and the Asian Tigers, in which a strong role for the state was normal.  He never considered the disastrous fast-track path to private ownership that the West successfully imposed on Russia under Yeltsin.

China under Mao had actually been matching the global average for economic growth, and was growing much faster than Britain, the USA or the Republic of India.[32]  And China was succeeding in the face of deep hostility from both the USA and the Soviet Union, both of which wanted to shape China in their own image.  Earlier Western influence on China had done it no good in the Late Imperial period, nor in the time of the Blue Republic, 1912-1949.  (Which is commonly called Nationalist, but which never once had a Central Government deserving of the term.)  China in that era had limited growth and modernisation in the coastal cities, but an actual decay of rural areas that had depended heavily on handicrafts that were now replaced by foreign imports paying very low duty.

Mao closed the borders and let Chinese industry grow in a protected environment – the actual system used by Britain in its Industrial Revolution, which was an era of strong tariff protection.  Deng and his successors allowed a limited opening-up, but only when this seemed to be in China’s best interests.  The disastrous deregulation of finance that has damaged most of the rest of the world has been avoided.

“By now it is relatively clear what Xi is aiming to do. He is trying to steer a complex economy and society through difficult times by top-down changes, led and controlled by a purged, disciplined and reinvigorated Leninist party. He is doing this in unprecedented conditions for such a party, consciously trying to combine the ‘invisible hand’ of the market with the ‘visible hand’ of the party-state. The ‘great helmsman’ Mao Zedong is clearly one inspiration, but the pragmatic reformer Deng Xiaoping is another. ‘To reignite a nation, Xi carries Deng’s torch,’ declared a commentary from the official news agency Xinhua.” (The Guardian, [33])

Unlike the Prospect writer, the Guardian writer keeps an open mind about whether Deng will succeed.  And when it comes to practical business matters, there seems to be a lot of confidence in China’s future.

“China’s currency may become a global reserve currency this year.

“The International Monetary Fund hinted that the promotion could happen when it said this week that it does not consider the yuan undervalued.

“The final decision will be taken at an IMF meeting in October.

“The move would mean the yuan joins an elite group of currencies including the US dollar, euro, pound and Japanese yen.”[34]

The previous view – almost certainly correct – is that the official rate made Chinese goods unrealistically cheap and imports unrealistically expensive.  This certainly helped China’s extremely fast growth in recent years.  Ending it was almost certainly a deliberate decision by the Chinese authorities, accepting a certain amount of economic pain for long-term gain, including reduced dependence on the dollar.  It must have contributed to the dip in China’s growth-rate, though part of that also is trying to push through the ‘middle-income trap’ while the West remains in recession.

Whether or not Chinese growth rates bounce back, the role of the yuan as a reserve currency will depend on confidence in the continuing strength and stability of China.  It will be interesting to see how many people in the West put their money where their mouth isn’t.


New Lands in the South China Sea

“Military installations in the South China Sea would provide platforms for land, air and sea-launched weapon systems sufficient to raise the cost of U.S. military actions in the region to prohibitive levels…

“The claim that the new islands are disrupting the United States’ freedom of navigation is a red herring. To date, China has done nothing in the South China Sea to disrupt shipping. It has countered activities by other countries who assert their ownership and control in the region, notably Vietnam and the Philippines, and has asserted its own ownership and control by intercepting fishing vessels and placing oil rigs in the area. Yet none of these actions have disrupted shipping in the region.” [35]

It’s a general rule of war that no ship wants to take on land-based defences.  Sir Frances Drake, famed for his bold attacks, would always land men and attack forts from dry land when this was an option.  And during the US Civil War, there were warnings against attempts to use the newly-developed ironclad ships against forts.  “A single shot will sink a ship, while a hundred rounds cannot silence a fort.”[36]

An actual war is very unlikely.  But diplomacy depends heavily on how people think a war would go, if anyone were willing to risk it.  China has a limited navy and so far just one small second-hand aircraft carrier.  But it has its own missiles, and these are increasingly a regional threat to the USA’s global sea power.



In Praise of Misery

I’ve often been puzzled by the negative and miserable attitudes that some people take to a world that is in many ways much better than we were expecting in the 1950s and 1960s.  I recently saw an interesting suggestion: misery can be a nice system of self-defence.  Under the title ‘The 14 Habits of Highly Miserable People‘, it says:

“When you’re miserable, people feel sorry for you. Not only that, they often feel obscurely guilty, as if your misery might somehow be their fault. This is good! There’s power in making other people feel guilty. The people who love you and those who depend on you will walk on eggshells to make sure that they don’t say or do anything that will increase your misery.

“When you’re miserable, since you have no hopes and expect nothing good to happen, you can’t be disappointed or disillusioned.

“Being miserable can give the impression that you’re a wise and worldly person, especially if you’re miserable not just about your life, but about society in general. You can project an aura of someone burdened by a form of profound, tragic, existential knowledge that happy, shallow people can’t possibly appreciate.”[37]


If the Prague Spring had succeeded…

I’ve said many times that we’d have a very different world if the Czechoslovak reformed Leninism that was crushed in 1968 had instead changed the Soviet bloc.  Now I find someone else presenting a similar suggestion:

“Imagine an alternative universe in which the two major Cold War superpowers evolved into the United Soviet Socialist States. The conjoined entity, linked perhaps by a new Bering Straits land bridge, combines the optimal features of capitalism and collectivism. From Siberia to Sioux City, we’d all be living in one giant Sweden.

“It sounds like either the paranoid nightmare of a John Bircher or the wildly optimistic dream of Vermont socialist Bernie Sanders.

“Back in the 1960s and 1970s, however, this was a rather conventional view, at least among influential thinkers like economist John Kenneth Galbraith who predicted that the United States and the Soviet Union would converge at some point in the future with the market tempered by planning and planning invigorated by the market. Like many an academic notion, it didn’t come to pass. The United States veered off in the direction of Reaganomics. And the Soviet Union eventually collapsed.”[38]

The Soviet Union under Brezhnev actually ruined that future by seeking a continuing global hegemony.  And by copying the wrong aspects of Western society, creating an artificial market system that disrupted planning without giving real freedom to enterprises.

But with the rise of China, and its continued belief in the Mixed Economy, that sort of future could still arrive.



Previous Newsnotes can be found at the Labour Affairs website,  And at my own website,