2017 10 – Newsnotes

Notes On The News

by Gwydion M Williams


The Never-Ending Tories?

With hindsight, we can see that Brezhnev doomed the Soviet Union.  At the time it looked enormously strong.  Able maybe to advance into South Asia, once they crushed resistance in Afghanistan.  But within 7 years of his death,[1] it was all breaking up.

Will future historians say the same thing of Thatcher and the Tories?  Has she set a party with 17th century roots on a path to ignominy and oblivion?

It is normal for political parties to have a definite lifetime, and theirs is unusually old.  Toryism emerged in 1678, to defend the right of the Roman Catholic James to be heir to Charles 2nd, who himself was privately a Catholic.  The bulk of them also compromised in 1688, when the English mainstream lost trust in King James and rallied to William of Orange.

Over three centuries, they compromised many more times.  Defending the working class from free-market excesses from the 1830s to 1850s.  Accepted the Welfare State after World War Two.  Accepted the loss of the dwindling British Empire after bitter wars in Cyprus and Kenya.

Thatcher changed all that.  She started an ideological drive that has made the entire Tory Party hostile to the modern state.  And in practice hostile to the small independent businesses that the older sort of Tory once defended.  To the new sort, the only point of a small business is to grow into a huge enormously profitable business.  The rest are failures and not wanted.

Small businesses have been falling like ninepins in the crisis that began in 2008.  Money was given to the banks, who were supposed to pass it on.  Who preferred to keep it to balance ‘assets’ from Fancy Finance that might be completely worthless.

The tax system is also rigged to make it easy for the rich to legally avoid tax.  Not much harder to evade them.  But since state spending has not been reduced at all after many years of Tory rule, the taxes still get paid.  Paid by small businesses and by the working mainstream, who would pay less for better returns if the system were fairer.

Labour has promised to increase the number of tax inspectors.[2]  And end fiddles whereby gigantic corporations claim to be based in absurdly small islands in the Caribbean, avoiding most taxes in the places where they actually exist.[3]

One of Thatcher’s last acts was to get Britain committed to overthrowing Saddam Hussein in Iraq.  Bush Senior maybe realised that Saddam and people like him were the only functional pro-Western force in Iraq.  He cut short the war, hoping that Saddam could be replaced by someone very much like Saddam, which could be claimed as a victory.  But the whole ideological revolution spearheaded by Thatcher and Reagan meant that it was impossible to make peace with Saddam and ease the suffering of the Iraqi people.  Suffering which inspired most of the violent Islamists, even though they were violent foes of Saddam.  (Foes precisely because he was a functional Westerniser, and they wanted the exact opposite.)


Abandoning Britain?

Thatcherism failed economically.  The 1980s were no better overall than the ‘disastrous’ 1970s.  We continued to lose ground.   Germany has bounced back much stronger from the pain of absorbing and trashing East Germany.

Not liking the results of their own actions, a section of the Tories decided that the European Union was to blame.  Free to make its own trade deals, the UK would surely do better.

Back in the 1960s, many said that Britain had lost an empire and not yet found a role.  Merging with the USA was considered, but joining the expanding European Union was preferred.  And now has been mindlessly rejected, by people who can’t face up to how much weaker post-Thatcher Britain has become.

Maybe the Brexiteers think Britain can find a Swiss Role – a haven for dirty money, even more than London now is.  But this depends on a strong underlying economy, otherwise investors will fear economic collapse.

As some non-Britons had hoped, British withdrawal has strengthened the European Union.  It is ready to accept pain and loss in return for making it clear that quitting the Union is not a soft option.  And with no need to please Britain, integration should increase.

A lot of rich Britons seem to be keeping the assets liquid so that they can use the deregulated financial system to rapidly pull their money out of Britain if things go badly:

“Britain’s manufacturing exporters have ‘hoarded’ the gains from last year’s fall in sterling by putting up prices rather than increasing output and sales.

“The Office for National Statistics said exporters could have allowed their prices to decline in line with the fall in the pound, making their products more attractive to foreign buyers, but chose to boost their profits instead.

“Illustrating the uncertainty following the Brexit vote, which has made exporters nervous about expanding production, analysis by the ONS shows that UK companies increased export prices by 12.7% year on year in the months after the referendum in response to a 16.9% fall in the exchange rate.

“The figures will disappoint Brexit campaigners who have urged exporters to make the most of the fall in sterling by expanding production and increasing employment.”[4]

British business saw Brexit was a bad idea.  As indeed did Theresa May, but many have accused her of being lukewarm.  Of positioning herself to be the next leader.  Which has worked in the short run, but maybe gives her a role equivalent to Gorbachev in the Tory Party’s decline and fall.


Traffic Accidents and Unemployment

Blaming most of the unemployed for their plight is no more sensible than blaming everyone who has been involved in a traffic accident.

You could imagine a theory of ‘Rational Traffic-Flow’.  It starts from the obvious fact that people would not set off in a car with the intention of having an accident.  Therefore, if they actually have an accident, they must be bad and inferior people and do not merit sympathy.

Of course some people do drive carelessly, or too fast.  This makes accidents more likely.  But there is also almost always some bad luck, and ‘accident black spots’ are well known.  And people who drive safely may be hit by speeding fools.

A theory of Rational Traffic-Flow would also ‘prove’ that traffic jams either do not exist, or are a result of needless state regulation.

No one actually believes this, of course.  They may fiercely denounce new rules for road safety as tantamount to jack-booted Stalins thrusting their way into the privacy of your own bedroom.  But I’ve never come across anyone protesting at intrusive regulations like a driving licence and compulsory licence plates.  Nor with official rules at junctions and traffic lights.

Every road-user has a basic understanding of the dynamics of real traffic.  Economics is always confusing and distant.  We interact with the wider society using money.  This ‘cash nexus’, once denounced by conservatives, is now seen as the reality of economics.

There are plenty of good popular accounts of the Galapagos finches that inspired Darwin.  Not one about the 18th century pin-making that Adam Smith used as a model.  It matters that Smith’s account is a false account of a complex industry.[5]

The ‘Theory of Rational Markets’ has been a nice cover for having a vast tax-subsidised state machine serve the interests of a more-than-millionaire class.  The Tories and US Republicans spent their way out of the brief half-forgotten crisis of 1987, when markets slumped drastically.  In 2008, they prevented a chain reaction of bank collapses by giving them free money under the nice label ‘Quantitative Easing’.  Rather than let the assets of the very rich be devalued, they used Austerity to reassure financial markets and inflicted pain on the rest of the society.


Korea – Still Shadow-Boxing

North Korea makes aggressive noises, but has never gone too far.  Has specialised in irritating the USA and getting away with it.

President Kim can pose as the global equal of President Trump, rather than as boss of the poorer half of a medium-sized country.  And President Trump can also play the game, to distract from his general failure.  Perhaps as cover for another gigantic lowering of taxes on the rich.

It is anyway sensible for North Korea to make it clear that it could wreck South Korea and Japan if it were invaded.  Might even hit the USA, which counts for much more.

The average US citizen is wonderfully stoical about other people’s suffering, including fake heroes doing improbable things in Hollywood movies.  But with a dwindling number of honourable exceptions, they make an enormous noise about anything that hurts them personally.  Witness the coverage of hurricanes Harvey and Irma, when many others suffered much worse.

Trump knows this.  He can’t do what Churchill did – say ‘I have nothing to offer but blood, toil, tears and sweat’.  The howl would be off the scale.

Meantime President Xi is quietly accumulating power, for China and for himself. Just how strong he is personally will be seen in mid-October, when big changes happen in the top leadership.


China Successfully Sins Against Capitalism

“Firms around the world face ever more intense competition from their Chinese rivals. China is not the first country to industrialise, but none has ever made the leap so rapidly and on such a monumental scale. Little more than a decade ago Chinese boom towns churned out zips, socks and cigarette lighters. Today the country is at the global frontier of new technology in everything from mobile payments to driverless cars.”[6]

That’s from The Economist, which naturally also tells China it is doing it all wrong.  But makes its money by providing useful hard facts for business:

“In recent days China set the record for the world’s fastest long-distance bullet train, which hurtled between Beijing and Shanghai at 350kph (217mph). This was a triumph of industrial policy as much as of engineering. China’s first high-speed trains started rolling only a decade ago; today the country has 20,000km of high-speed track, more than the rest of the world combined. China could not have built this without a strong government. The state provided funds for research, land for tracks, aid for loss-making railways, subsidies for equipment-makers and, most controversially, incentives for foreign companies to share commercial secrets.

“High-speed rail is a prime example of the Chinese government’s prowess at identifying priority industries and deploying money and policy tools to nurture them. It inspires awe of what it can accomplish and fear that other countries stand little chance against such a formidable competitor. Yet there have also been big industrial-policy misses, notably the failure to develop strong car manufacturers and semiconductor-makers. China is rolling out a new generation of industrial policies, directed at a range of advanced sectors, raising worries that it will dominate everything from robotics to artificial intelligence. That result is far from preordained.”[7]

Little more than a decade ago, The Economist was assuring us that something bad would soon happen to China, if it held out against New Right wisdom.

Japan, after a run of brilliant success, started listening to New Right ‘wisdom’ in the 1980s.  Has fallen into a stagnation that it cannot escape from.


Abnormal Weather the New Normal

Hurricanes are fickle things.  But global warming means more very large hurricanes.  Disasters like Harvey and Irma.

“Before it reached the Gulf of Mexico, Harvey had been demoted from a tropical storm to a tropical wave. But as it reached the Gulf, where temperatures this month have been far above average, it was upgraded first to a tropical depression, then to a category one hurricane. It might have been expected to weaken as it approached the coast, as hurricanes churn the sea, bringing cooler waters to the surface. But the water it brought up from 100 metres and more was also unusually warm. By the time it reached land, Harvey had intensified to a category four hurricane.”[8]

Other big hurricanes did not hit the USA.  Hurricane Jose was Category 4: Hurricane Maria was Category 5.  Both turned north early on.

The USA had a respite after the very bad season in 2005.  They might get another dozen years of relative calm.  But as I said at the time,[9] there is reason to fear:

“For many scientists [Harvey and Irma] are a worrying sign of a ‘new normal’ in which extreme weather events become more intense as a result of manmade climate change.”[10]


Weak Socialism, Violent Religion

Islam has become more hard-line, after the West chose to attack secular nationalism.  Believed that they could stuff the human soul into a set of crude commercial values.

Socialism answered wider needs.  Where it remains strong, the global surge in aggressive religion has been minimised.

I also find it suspicious that Islamic terrorists in Britain keep on exploding defective devices, as with the Parsons Green bomb.  The repeated accusation that Western intelligence agencies have been cultivating them as an excuse for repression is maybe not so absurd.

It is not just Islam. Hindu extremism in India puts Hindu myths as real events in school science textbooks.[11]  Orthodox Christians in Russia threaten violence over a film that apparently twists truths about the last Tsar.

“Nicholas II, who was executed along with his family by Communist revolutionaries in 1918, was canonised by the Russian Orthodox church in 2000. Some Russian Orthodox Christians claim the film [Matilda], which was funded by the culture ministry, is blasphemous because it portrays the ‘holy tsar’ in love scenes.”[12]

Western historians see the Tsar as a weak bungler.  Less often mentioned are the pogroms that happened during his reign, which had obvious official sympathy.  Were intended to drive Jews out of ‘Holy Russia’ (with many becoming enormously useful citizens in Britain and the USA).  That the Tsar didn’t know is impossible: he had liberal ministers who were against it.

The man was a fool, but not a Holy Fool.  Russian Orthodoxy has made itself ridiculous celebrating him.  But it is part of a global pattern of folly.



Just Give Me Money?

The Saudi dynasty are an oddity in a fast-changing world.  Do they now doubt that they will last?

“Saudi Arabia is lining up a privatisation of state assets that dwarfs the Thatcher ‘revolution’ of the 1980s, and rivals the 1990s dissolution of Soviet assets in scale and significance. It has hung a ‘for sale’ sign on virtually every sector of Saudi economic life: oil, electricity, water, transport, retail, schools and healthcare. Even the kingdom’s football clubs are due to be auctioned off…

“With oil stuck around the $50 mark, Saudi budgets are creaking and deficits are widening. Around $75 is regarded as the break-even point for the national finances.”[13]

But it is the Saudi regime that keeps the price low, by refusing to cut production.  Hurting many countries, including Russia and irritatingly left-wing Venezuela.

A sudden coup or revolution would lose them the value of state assets and oil still in the ground.  But not assets moved into the global financial system.


Buddhism Without Compassion

“The security operation targeting Rohingya Muslims in Myanmar ‘seems a textbook example of ethnic cleansing’, the UN human rights chief says…

“About 294,000 Rohingya Muslims have fled to Bangladesh since violence erupted in Rakhine state last month.

“The military says it is responding to attacks by Rohingya militants and denies it is targeting civilians.

“The violence began on 25 August when the Rohingya militants attacked police posts, killing 12 security personnel.

“Rohingyas who have fled Myanmar since then say the military responded with a brutal campaign, burning villages and beating and killing civilians.”[14]

As usual, nothing serious is being done to prevent it.  It will be another successful Ethnic Cleansing, soon forgotten like the eviction of Serbs from Croatia and most of Kosovo.


Planned cull of MPs abandoned

The Tory Manifesto had an outrageous plan to cut the number of MPs from 650 to 600.

It was outrageous because it would have ‘accidentally’ produced a vast bias.  Let the Tories win more seats with fewer votes than Labour in some future election.  As they did in 1951, when Churchill had a secure majority for his ineffective final term, even though Labour got slightly more votes.

As I said in Newsnotes for July / August, it would have given Sinn Fein more seats at Westminster than the DUP.  Not something for Tories to worry about, since Sinn Fein refuse to attend.  But with the Tories now dependent on DUP votes, I was expecting it to be dropped.  And it seems now it has.[15]

Or just possibly they could find an alternative ‘reform’ that would hurt Labour but not the DUP.  The most absurd and reactionary things have been done under the nice label of ‘reform’.


Another Vanishing Document

A lot of British respectability was undermined by the Profumo affair, which broke in 1963 and undermined Harold Macmillan.  (Who with hindsight looks like one of the best Tory prime ministers ever.)

Central to the scandal was Stephen Ward, a highly successful osteopath who moved in top establishment circles.  He associated with prostitutes, but he didn’t make a living off of them.  He supported them in times of trouble and seems to have received small sums of money at other times.  This made him technically guilty of pimping, and he was convicted in defiance of common sense.  Or so many people said, and felt the judge was horribly biased.  But now we will never know:

“The Criminal Case Review Commission (CCRC) told Ward’s family on Friday they will not be sending the osteopath’s 1963 conviction for appeal as they cannot find an original transcript of the judge’s summing up…

“Geoffrey Robertson QC, representing the family, said… ‘it is mysterious – suspicious, almost – that every copy of the transcript of the wretchedly biased summing up has gone missing’.”[16]



Previous Newsnotes can be found at the Labour Affairs website, https://labouraffairsmagazine.com/past-issues/.  And at my own website, https://longrevolution.wordpress.com/newsnotes-historic/.



[1]              He died in 1982.  They lost Middle-Europe in 1989, with the Soviet Union itself falling in 1991.

[2]              http://www.mirror.co.uk/news/politics/labour-hire-army-tax-inspectors-11102661

[3]              https://uk.reuters.com/article/uk-eu-tax-digital/eu-lost-up-to-5-4-billion-euros-in-tax-revenues-from-google-facebook-report-idUKKCN1BO22I

[4]              https://www.theguardian.com/business/2017/sep/15/uk-exporters-have-hoarded-gains-from-fall-in-sterling-says-ons

[5]              See https://gwydionwilliams.com/48-economics/how-national-economies-really-grow/

[6]              https://www.economist.com/news/leaders/21729430-does-it-play-fair-how-china-battling-ever-more-intensely-world-markets (subscriber site)

[7]              https://www.economist.com/news/finance-and-economics/21729442-its-record-industrial-policy-successes-patchy-china-sets-its-sights (subscriber site)

[8]              https://www.theguardian.com/commentisfree/2017/aug/29/hurricane-harvey-manmade-climate-disaster-world-catastrophe

[9]              https://gwydionwilliams.com/newsnotes-historic/newsnotes-to-2009/2005-newsnotes/newsnotes-2005-10/#_Toc417392128

[10]             https://www.theguardian.com/world/2017/sep/06/twin-megastorms-irma-harvey-scientists-fear-new-normal

[11]             http://www.bbc.co.uk/news/world-asia-india-41344136

[12]             https://www.theguardian.com/world/2017/sep/11/alexei-uchitel-matilda-film-about-russia-holy-tsar-premieres-after-threats

[13]             https://www.theguardian.com/world/2017/sep/02/great-saudi-sell-off-bankers-lawyers-flocking-gulf

[14]             http://www.bbc.co.uk/news/world-asia-41224108

[15]             https://www.theguardian.com/politics/2017/sep/06/theresa-may-to-ditch-plans-to-cut-number-of-mps-from-650-to-600

[16]             https://www.theguardian.com/law/2017/sep/09/case-of-profumo-affairs-pimp-will-not-go-to-court-of-appeal