Category Archives: Politics

How not to manage a national economy – Britain 2021

Economists have always bemoaned about the lack of economic understanding demonstrated in the actions of our political leaders. However in Britain at least we have come to a unique time in our political history, a time when our leaders display an almost complete ignorance of the art of economic management.

The golden rule for the management of the economy should be don’t play fast and loose with the economy, because if you do it will come back and bite you. This our government did when the prioritised ideology and political advantage in negotiating Britain’s exit from the EU. They negotiated a deal that maximised the damage that would be inflicted on the British economy. The terms were so bad for the fishing industry that Scottish fisherman are registering their boats in Copenhagen as Danish, so they can sell their catch to the Europeans. The terms of the deal make it very difficult if not impossible to sell fish direct to Europe from Britain. Already with shortages in the supermarkets and a fuel crisis the government is having to backtrack on the terms of it deal, trying to minimise the negative impact of the deal. Already its going back on its hard line on European immigration in an attempt to persuade European HGV drivers to return to Britain, as a shortage of native HGV drivers mean food products are being left to rot in the fields or warehouses. Slowly step by step the government is removing the restrictions on European HGV drivers that it imposed in January.

Britain is a trading nation and whose peoples well being the well being is dependent on International trade. Only about 60% of Britains food is produced in the country the rest has to be imported. A fact understood by both the German Kaiser and Hitler in both world wars. They tried to bring Britain to its knees by stopping or limiting the import of food and essential raw materials through submarine warfare. Surprisingly the government of Boris Johnson has done something similar to what both the Kaiser and Hitler aspired. It has imposed barriers to the trade with our largest trading partner Europe. The barriers are the imposition of a complex system of controls on trade, so complex that many businesses either side of the channel have withdrawn from trading with Britain or Europe.

What passes under the political radar Westminster is businesses complaints about the large quantity of paperwork required to export to Europe, now we have left the single market. One exporter claimed that now they have to complete 28 separate forms when exporting to Europe, whereas before January that number was the imposition of new border controls trade with Germany has fallen. Imports from the UK have fallen by 56% and exports to the UK by 29%. If Germany was a small insignificant trading nation this would not matter, but Germany is the economic powerhouse of Europe, its largest economy. Soon if not already the UK will cease to be one of the top ten nations with whom Germany trades. Only a politician blind to reality could show indifference to such a catastrophic decline in trade.

Already significant sectors of the economy show marked signs of economic distress. Agriculture, fishing and the food processing industries are examples of this distress. The export of British cheese to Europe has become almost impossible. This downturn in foreign trade is significant because it means there will be a downturn in the level of economic activity, most likely leading to a recession. How far the downturn will go is hard to predict, all that can be said is it’s foolish to deliberately engineer a downturn is economic activity, as any downturn can gain momentum and leading to a very nasty recession. Golden rule number 2, it is easier to start a downturn in economic activity, than to stop one, so don’t start one unless there are compelling economic reasons for doing so.

What appears an unknown to our political leaders, is something called the economies of disintegration. Through reducing production on site and outsourcing it to the cheapest suppliers in the world, the cost of manufacturing has come down rapidly. There is no longer such a thing as a British car, parts come from all over the world. Under this system a car part such as the carburettor can go back and across the English Channel eight times, before the its assembly is completed. Now the government has hit the supply chains with a wrecking ball, no longer can manufactured goods pass freely between Britain and Europe. This wrecking ball is the mountain of paper work required by the import/export authorities of each country. While it can be said that the supply chains of business are far too long and too easily disrupted, it does not make any economic sense for the government to suddenly interrupt the free flow of goods in this supply chain. This will cause shortages and disruption in the domestic industries, as they have been denied the time to adjust to the changes. I cannot predict what will happen in the long term to British manufacturing industry, but the short term effect of interrupting the supply chain will be a decline in manufacturing industry.

If Boris Johnson and his Brexiter government is correct, all previous governments that believed British prosperity depended on increasing it trade with the rest of the world were wrong. Although this government boasts of increasing trade with the rest of the world, its rhetoric gives away the reality. When the government talks of the need for the spirit of the Blitz it is telling a different story. The Blitz was a time of shortages and rationing. Already there are plenty of indicators that the British economy is heading into a dark time, when shortages of goods become common place. A cartoon in a German newspaper sums this situation. A travel agent is talking to a couple who want to travel somewhere, where they can experience the shortages and inconveniences of the former East Germany, the agent recommends a stay in Brexit Britain.

When the economist John Galbraith discussed the means by which the horrors of the Great Depression of 1929 could have been averted, he said steps should have been taken to restore business confidence. A series of meeting between the President and business leaders would have done a lot restore confidence in the business community. Knowing that the government was taking their concerns seriously and acting on them would have done wonders to restore business confidence. Confidence is necessary if businesses are to invest and that new investment would have kickstarted the economy. Of all that I have mentioned this psychological factor is the probably the most significant. A loss of business confidence can easily turn a downturn into a recession or even worse a serious depression. Again Britain is a good example of what not to do in terms of leadership. The impression it gives is that it’s not listening to business. In response to concerns about the negative impact of the rise in gas prices on the biggest users, the government has made it clear it is not willing to help, except in extremis, as business has had plenty of government money already to tide it over during the pandemic, there is no more left. If anything can be more calculated to destroy business confidence, I cannot think of it. All this is compounded by the character of the Prime Minister. He is known for his lack of interest in the detail of government, as a leader he lacks gravitas. At the last Conservative party conference he amused those in attendance with a series of jokes. Those not at the conference noted his lack of interest in the crises that were happening outside the conference hall. The government’s actions, plus the knowledge that we have a lightweight as political leader, will do little to restore business confidence. Golden rule number three, when an economic crisis threatens government should act appropriately, it must never seem indifferent to the crisis. The sterling crisis of 1976 was in worsened by the Chancellor, Jim Callaghan on being questioned at the airport on his return from an international conference about the crisis, said’ ‘what crisis” giving the impression of being somebody not in command of the facts.

In the future students of economics and business studies will be given Brexit Britain as a case study in how not to manage an economy, or to put it more brutally how to turn a formerly prosperous nation into a basket case.

Hibernating Bear Politics or an Explanation of the Dullness of Contemporary Political Practice

Whenever I try to explain contemporary politics to myself, I look to simple analogies or metaphors. I find the metaphor of the hibernating bear most useful in this respect. The bear to survive in winter when food is short, hibernates. Waking only in spring when food supplies are plentiful again. To me this explains perfectly the behaviour of the British Labour Party.

They have been beaten in serial elections and the last in 2019 suggested that they face an existential crisis. Supposedly core voters have defected to the winning party giving them an overwhelming majority in the House of Commons. Their dominance is such that they can pass legislation that disadvantages the opposition making it almost impossible for them to win the next election, without facing any real opposition in parliament. Labour as serially defeated party have opted for survival mode. Hibernating during the long winter of Conservative ascendancy and only coming out of hibernation in the political spring. The political spring is expected to occur in or about the time of the next election, when the increasing unpopularity of the government renders then vulnerable.

Political hibernation is a peculiar thing, it means keeping your heads down and doing nothing that would attract negative headlines.In practice this means doing just enough to remind people that you are still around, but nothing anything dramatic that might attract negative headlines or offer any hostages to the future. Operating in this mode the leadership will criticise the government, but not go as far as offering any policies of their own. Just this week the opposition criticised the government for funding social care through an increase in national insurance charges as it would impact negatively on the lowest paid, but avoided making comment to any alternative policy. A somnolent politics or as the opposition would describe a cautious and realistic politics. Whatever it might be it a curiously dull, stupefying type of politics.

Again referring to the hibernating bear, that bear through hibernation is husbanding their strength, waiting to use it again in spring, when food sources are abundant and its strength will be used most profitably. Similarly the opposition can and does argue that it must husband its strength, that is resources until the general election, when those resources can be used to greatest advantage. The election is the only contest that matters and as with the bear, over activity now will only exhaust its resources for little return. It might even threaten its survival.

While opting for survival over a more active politics might appear sound practice it has its disadvantages. When the bear awakens in spring it’s weak and must immediately find food if its to survive. Similarly the long period of somnolent or minimalist political politics leaves the opposition weakened. Going from a time ultra cautious practice to a period of hyperactivity is fraught with danger. If politics is not practised with vigour it can ossify. The young idealistic activists would have long left the party, putt off by its caution and switched allegiance to other radical parties that share their idealism. A problem particularly true of the Labour Party, whose young idealistic activists practise a left wing radical politics not shared by the leadership. Fearing these young pretenders to the throne will alienate the media and key swing voters, the party leadership seeks to discourage and repress them. Offering a collective sigh of relief when these disruptive activists leave the party in disgust at the leaderships passivity and conservatism. However these enthusiasts are the very people the party needs at elections. Being at a huge financial disadvantage, the Conservatives have huge financial resources compared to the Labour Party and they can massively outspend them at elections. What the Conservatives lack is a youthful enthusiastic membership that can knock on doors and campaign actively in the constituencies. An advantage that can offset the Conservatives financial muscle. I fear the Labour Party will be like the hibernating bear that has slept too long and found that all its rivals have already taken possession of the best food sources.

The hibernating bear metaphor leaves me pessimistic for the future. While the politics of hibernation may enable a political party to survive it does not turn it into a winner. Probably the best that can be hoped is that at the next election the party retains sufficient MPs be competitive at some future election. Although there is an alternative scenario, a harsh one that derives from the cruelty of nature. Old bears weaken through age may not be able to compete with younger bears for food and consequently die. Similarly there is a chance that the somnolent Labour Party will be displaced by a younger radical rival, as happened when the Labour Party replaced the Liberal Party as the other majority party in the 1920s.

I write this as a disillusioned Labour supporter, trying to make sense of the nullity of the politics practised by the party of which I have been a lifelong supporter. Why a former party of radical idealism, has become an uninspiring party of caution? A political party that appears dead in the water. Also I must add that I think the survival politics as practised by the British Labour Party is not unique to the UK.

This Economist’s explanation of why nothing ever appears to happen in the Westminster political scene

Politics in Britain appears to be a in state of stasis, nothing seems to happen. No longer is Westminster forum were the decisions crucial to our future well being are made, dullness and a ‘do nothing’ manner seem to prevail. In part this can be put down to Britain decline, both relative and real. Being now of relative global insignificance seems to have a negative impact, realising that are now figures of little significance, fearing that they can do little any import, they have lost the desire to do. However it might not he the loss of empire and the loss respect of the world’s leading statesman that account for this sense of ennui at Westminster. Economic theory offers an alternative explanation.

Parliament is dominated by two parties, although the rise of nationalist parties, in particular in Scotland pose a threat, the power duopoly of Conservative/Labour has not yet been seriously threatened. Duopoly is the extreme example of an oligopolist market and it is the theory of oligopoly that explains this political inertia or caution. Caution is the word that best describes the behaviour of oligopolists. They have reached this position of great power and don’t want to do anything that might threaten this power. What they realise is the power of their rivals is such that they have the potential to do great damage to them. Therefore they will do all in their power to avoid radical or aggressive actions that could provoke a damaging war with their powerful rivals. What they fear most is losing votes to their rival, much as the oligopolist fears losing market share to its rivals. What exist between oligopolists is an undeclared war or a truce of kinds. All fearing a damaging trade or political war that could inflict a death blow to their business or political party.

Oligopolists compete within certain parameters, fearing not to upset the apple cart. Businesses compete not with price but through advertising, marketing. Hoping at best to make modest inroads in a competitors sales. Similarly politics in Britain is another phoney war, conducted within strict parameters, parameters defined by the mainstream political culture. One of these parameters is responsible. Policies be responsible, not commit the partly to a great spending programme, because voters fear for their wallets. The political truism observed by all is increasing taxes is a vote loser, while reducing them is a vote winner. Also responsible politics doesn’t threaten powerful vest interests. The best example is the property lobby. Any policy that might threaten house prices is a ‘no-no’. This mainstream view also excludes as possible policies, those that while they may promise needed radical change, are too difficult to implement as they will upset power groups in society or voters.

In consequence politics is predominantly a war of words, each party claims that they possess that unique set of values that make them best suited to governing the country. Policy statements or policies spelt out in detail are anathema, as they can start a political bidding war in which each strives to out do the other. Potentially damaging to both parties as they have to make good on their policy promises. A leader can state that he wants every person in the country to have a job that guarantees a fair wage, an income that maximises their well being, but must never state how that would be achieved.

This can lead to the politics of dullness, with each party hoping to keep their share of the vote and remaining a major party. Hoping that this caution will be rewarded with those few extra votes that translate into a majority in parliament. The peculiarity of the British electoral system is that a marginally small but larger share of the vote can translate into a disproportionately larger number of parliamentary seats.

One other characteristic that political parties share with oligopolistic corporations, is a ruthlessness in preventing new entrants coming into the market. They are aware that their majority position in politics is always under threat, they are aware that the once in a lifetime event that changes the political landscape. A change which gives an outsider the opportunity to replace one of the two main parties, as occurred in the 1920s, when Labour replaced the Liberals as one of the two main parties.

This strategy is action is demonstrated by the risky strategy that the Conservative party adopted over Brexit. Its vote was threatened by the Brexit party, which one a majority at the last European election, through the support of disaffected Conservative voters. To crush this upstart the party adopted the Brexit party policy so depriving it of the political oxygen which it needed to thrive. This was a risky strategy as it meant their rivals the Labour Party could have opted for Remain, which would have put at risk their candidates in strongly Remain constituencies. Fortunately for them the Labour Party read the political runes and decided that majority opinion or the voters that mattered were for leaving the EU*. This about volte face by two predominantly Remainer parties, deprived the half of the nation wanting to stay in the EU unrepresented.

What can be said is that the British political system works to favour the two main parties in situ? No matter how outrageous their behaviours or betrayals, they need fear being voted out. British politics will continue in its outrageous but merry way refusing to countenance any change. Change that might threaten the power of the two dominant parties. Even when the crisis of climate change is becoming increasingly apparent neither of the two main parties will be willing to make the radical change necessary to help avert it. When the Conservative government reneged on its promise to install a national charging grid for electric cars, Labour remained silent. Fearing being accused of making irresponsible policy commitments that would threaten existing jobs in the motor trade, forcing on the country a change they may not want. Giving the leadership of Cop26 to any British politician is detrimental to the well being of the world. All that can be expected is lots of words, words used to say the right thing but devoid of meaning or commitment. Possibly this is a sign of Britain’s decline, a not willing to commit to anything that might threaten to diminish further Britain’s international power and reputation.

The fallacious misunderstanding of the medieval world and why it matters

The medieval world has been characterised as the Dark Ages, a misconception that remains current today. One example that comes to mind is the television presenter and historian who on describing the fall of Constantinople, said that the siege was of little concern to the monks of St.Sophia who would be spending their time debating such unworldly issues as to how many angels could dance on a pin head. What the presenter did not realise was that he was repeating the black propaganda used by the Protestants to discredit there Catholicism. In fact if he had read William of Ockham, he would have discovered that the thinking of medieval theologians was both pragmatic and sophisticated. In fact David Hume cited William as one of key thinkers that influenced his philosophy. His essay the ‘Treatise on Human Nature’ echoes William’s scepticism about the limitations of human reason. Although separated by five hundred years and starting from different intellectual standpoints, there conclusions are remarkably similar. Seb Falk a historian decided to turn this thinking on its head by writing a book about medieval science, that he called ‘The Light Ages’.

Seb Falk’s contention is that despite its mischaracterisation, this time was a period of remarkable scientific and mathematical advance. Sun dials he states that despite their rudimentary construction could be sophisticated means of measuring time. He gives as evidence of this sophistication the astrolabe. A flat disc that when used with a sighting device for checking the position of the stars or sun could determine the viewer’s latitude and longitude. They knew that there location could affect their astronomical reading, as position of the stars the sky would change according to their latitude. John Westryk a monk from St.Albans knew that when he was relocated to Tynemouth could still use an astrolabe made for use at the southern location of St.Albans, because the small variation in latitude would only effect a minimal change in the position of the stars.

Despite their wrongful belief that earth was at the centre of seven concentric circles of heaven, each one being ever closer to God, they were remarkably accurate in their charting of the night sky.

Sailors in the open sea would use the cross staff or astrolabe to find their position. By the fourteenth century sailors were using compasses and charts marked with rhumb lines. The latter were lines leading to various ports. Despite what appears to be the rudimentary nature of their navigational aids, they were capable of accurately navigating the seas. British and other fishermen by the end of this period were beginning to use this technology to find the fisheries located off Newfoundland. Manuscripts suggest that St.Brendan (an Irish monk) of the early medieval period may have been the first European to discover America.

What Seb Falk establishes is remarkable scientific understanding and practice existed within the learned clerical class.

This class also displayed a remarkable openness to non Christian thinking. The Arab philosopher Avicenna was significant, it was through familiarity with his writings that medieval theologians became familiar with the works of Aristotle. It was through the writings of these theologians that Aristotle was reintroduced into the Christian world. Such was the sophistication of their philosophical reasoning, that later philosophers made use of their findings. In fact the use of Avicenna in their writings was controversial, it was the two path controversy. Christians believed that truth could only be found through faith, now Avicenna was saying that truth could be found through philosophy. In fact he believed that only the philosopher could truly know the truths of God. Theologians would accuse their rivals of being adherents of the two truth theory, which was anathema to the church. This and other contentious issues ensured that medieval universities were lively and stimulating centres of learning. Often earning the censure if the church authorities, as happened to the university of Paris.

There is the intriguing story concerning St.Francis of Assisi. He took time out from his reforming work to travel to Spain. Idries Shah believes that he was hoping find the master, a man he made many references to. Shah thinks the master was Rumi the great muslim thinker and poet. Speculation perhaps, but the medieval church was more open to new ideas that is usually thought.

Medieval universities could be lively places of intellectual discovery, but there was a dark side to the medieval university. William of Ockham a particularly controversial thinker was accused of heresy by the master Oxford university, and had to flee to the continent.

I am aware that in describing medieval England as a time of enlightenment and intellectual advance, is painting as partial a picture as that of the Victorians who described it as the dark ages. How should we judge or characterise this period? By its monsters and the crimes they committed or by its best and most enlightened and their achievements? If the former it should be noted that the twentieth century regarded as a time of progress and advance, was a time when there were men such as Stalin, Hitler, Mao and Pol Pot who committed far worse crimes than there medieval predecessors.

At my last school my colleague taught the ‘Wars of the Roses’, as it was he said, an interesting period of history. Perhaps if we view education as a making a positive contribution to the students development, we should not glorify a group of arrogant, brutal men, who gloried in the butchery of their rivals.

I have always thought we neglect teaching what is best from the past. Once Erasmus’s’ ‘Adages’ was regarded as essential reading for statesman. Now a book only read by the intellectually curious. I value from that book the essay entitled ‘War is sweet only to those who have never tried it’. I think this should be required reading for any aspirant politician on a PPE course.

When we reflect on the achievements of the medieval period, does it not undermine the theory of human history as a constantly upward progressive movement? There are a group of Anglican theologians who think the high Middle Ages represent the peak of human civilisation. These radical orthodox theologians have among their adherents, the former Archbishop of Canterbury, Rowan Williams.

The fallacious misunderstanding of the medieval world and why it matters

The medieval world has been characterised as the Dark Ages, a misconception that remains current today. One example that comes to mind is the television presenter and historian who on describing the fall of Constantinople, said that the siege was of little concern to the monks of St.Sophia who would be spending their time debating such unworldly issues as to how many angels could dance on a pin head. What the presenter did not realise was that he was repeating the black propaganda used by the Protestants to discredit there Catholicism. In fact if he had read William of Ockham, he would have discovered that the thinking of medieval theologians was both pragmatic and sophisticated. In fact David Hume cited William as one of key thinkers that influenced his philosophy. His essay the ‘Treatise on Human Nature’ echoes William’s scepticism about the limitations of human reason. Although separated by five hundred years and starting from different intellectual standpoints, there conclusions are remarkably similar. Seb Falk a historian decided to turn this thinking on its head by writing a book about medieval science, that he called ‘The Light Ages’.

Seb Falk’s contention is that despite its mischaracterisation, this time was a period of remarkable scientific and mathematical advance. Sun dials he states that despite their rudimentary construction could be sophisticated means of measuring time. He gives as evidence of this sophistication the astrolabe. A flat disc that when used with a sighting device for checking the position of the stars or sun could determine the viewer’s latitude and longitude. They knew that there location could affect their astronomical reading, as position of the stars the sky would change according to their latitude. John Westryk a monk from St.Albans knew that when he was relocated to Tynemouth could still use an astrolabe made for use at the southern location of St.Albans, because the small variation in latitude would only effect a minimal change in the position of the stars.

Despite their wrongful belief that earth was at the centre of seven concentric circles of heaven, each one being ever closer to God, they were remarkably accurate in their charting of the night sky.

Sailors in the open sea would use the cross staff or astrolabe to find their position. By the fourteenth century sailors were using compasses and charts marked with rhumb lines. The latter were lines leading to various ports. Despite what appears to be the rudimentary nature of their navigational aids, they were capable of accurately navigating the seas. British and other fishermen by the end of this period were beginning to use this technology to find the fisheries located off Newfoundland. Manuscripts suggest that St.Brendan (an Irish monk) of the early medieval period may have been the first European to discover America.

What Seb Falk establishes is remarkable scientific understanding and practice existed within the learned clerical class.

This class also displayed a remarkable openness to non Christian thinking. The Arab philosopher Avicenna was significant, it was through familiarity with his writings that medieval theologians became familiar with the works of Aristotle. It was through the writings of these theologians that Aristotle was reintroduced into the Christian world. Such was the sophistication of their philosophical reasoning, that later philosophers made use of their findings. In fact the use of Avicenna in their writings was controversial, it was the two path controversy. Christians believed that truth could only be found through faith, now Avicenna was saying that truth could be found through philosophy. In fact he believed that only the philosopher could truly know the truths of God. Theologians would accuse their rivals of being adherents of the two truth theory, which was anathema to the church. This and other contentious issues ensured that medieval universities were lively and stimulating centres of learning. Often earning the censure if the church authorities, as happened to the university of Paris.

There is the intriguing story concerning St.Francis of Assisi. He took time out from his reforming work to travel to Spain. Idries Shah believes that he was hoping find the master, a man he made many references to. Shah thinks the master was Rumi the great muslim thinker and poet. Speculation perhaps, but the medieval church was more open to new ideas that is usually thought.

Medieval universities could be lively places of intellectual discovery, but there was a dark side to the medieval university. William of Ockham a particularly controversial thinker was accused of heresy by the master Oxford university, and had to flee to the continent.

I am aware that in describing medieval England as a time of enlightenment and intellectual advance, is painting as partial a picture as that of the Victorians who described it as the dark ages. How should we judge or characterise this period? By its monsters and the crimes they committed or by its best and most enlightened and their achievements? If the former it should be noted that the twentieth century regarded as a time of progress and advance, was a time when there were men such as Stalin, Hitler, Mao and Pol Pot who committed far worse crimes than there medieval predecessors.

At my last school my colleague taught the ‘Wars of the Roses’, as it was he said, an interesting period of history. Perhaps if we view education as a making a positive contribution to the students development, we should not glorify a group of arrogant, brutal men, who gloried in the butchery of their rivals.

I have always thought we neglect teaching what is best from the past. Once Erasmus’s’ ‘Adages’ was regarded as essential reading for statesman. Now a book only read by the intellectually curious. I value from that book the essay entitled ‘War is sweet only to those who have never tried it’. I think this should be required reading for any aspirant politician on a PPE course.

When we reflect on the achievements of the medieval period, does it not undermine the theory of human history as a constantly upward progressive movement? There are a group of Anglican theologians who think the high Middle Ages represent the peak of human civilisation. These radical orthodox theologians have among their adherents, the former Archbishop of Canterbury, Rowan Williams.

Good and Bad economics or Creative and Destructive Economics

From the very beginning of my teaching career I felt that I was not giving my students the complete story. Then just recently my son-in-law who is a joiner taught me something about economics that I should have known. The market is but one strand of the economic complex, what I and other economists have ignored is collaborative or creative economics. An economic practice that is not based solely on price, but other values, such as trust, respect and quality of work. Self employed construction workers such as my son-in-law, may work singly or with others when the task requires it. When a task calls for collaboration, collaborates are chosen on the basis of respect, trust and work ethic. They all know the profit maximiser who will cut costs and corners so as to achieve the maximum profit. These men make poor work colleagues and are best avoided.

This does not mean that there are not a number of bad tradesmen, who will produce a poor quality product or service. Men who make a good living from their trade but who former customers are desperate to avoid using again. Our local internet network is dominated by requests for the names of tradesmen who can be trusted to deliver a good quality service. While the market economists would say that the customer looks for the tradesmen who charge the lowest price, what most people want is quality of service. If a potential customer tried to force the price down to the lowest level, my son-in-law and his colleagues would just walk away.

While in the building trade there is a rogue element of profit maximisers, who cut costs to the bone to earn maximum profit, I suspect the majority are like my son-in-law ‘profit satisfiers’. Given the ignorance of the building trade potential customers find it hard to identify these rogue traders. Rogue traders who in the present shortage of tradesman can make a good living. However that does not discredit my belief that in the building trade, quality of service is valued more than price. Obviously price matters to both the customer and tradesmen, usually what is valued is the fair price, a price for the job that satisfies both customer and tradesman. It is a deal founded on trust, a trust that can unfortunately be abused. There are the customers who are tardy payers and the rip off merchants on the traders side.

What is required to make the construction market work more effectively is more regulation, of the right kind. Electricians are compelled to take regular tests to ensure their fitness to work in electrics. Unfortunately there is no effective mechanism from preventing the bad or poor electrician working in the trade. Anybody can advertise themselves as a builder qualified in all trades. A regulated market such as that found in Germany or Switzerland would improve immensely the work undertaken in the building trade.

From my knowledge of people working in the small and medium trader market, the same standards apply there. Even businesses solely driven by profit and not quality of service, such as the banks and other financial services, the success of these profit maximisers depends on their staff adopted collaborative working practices. If staff felt they could not trust each other, the business would soon collapse. Businesses don’t thrive if their staff are constantly at each other’s throats.

In this respect the practice in call centres, where staff are constantly monitored and required to meet performance tasks have a high turnover of staff. This works when unemployment is relatively high, as unemployed young people can be quickly trained in the simple skills required. Given the high and wasteful staff turnover such call centres find that treating staff well, equals higher productivity and higher staff retention. In even this industry values other than cost minimisation are adopted, contrary to market economics.

Collaborative working of the type undertaken by my son-in-law is creative economics, he is a profit maker. Whatever he makes or does adds value to the property. This is contrary to destructive economics, whereby the trader or business literally diminishes the value of the nation’s wealth. In economist’s terms, the profit taker or in common sense parlance the robber baron. Private equity companies are one of the worst practitioners of destructive economics. They loot the company of its most profitable assets and then return the ‘efficient’ business back to the market. Adding the resale price to the profits gained by selling the companies assets. These enfeebled businesses rarely survive long once returned to public ownership.

Another term for these non creative looters, is rentier capitalists. One example of this is those business that buy the copyright of a particular musician. Then with the ownership of these rights they can charge exorbitant sums to those who make use of this artists music. They are assiduous in keeping control of the right to profit from that artist work, often resorting to court when they believe their rights have been infringed. Unfortunately a list of these corporate looters is most endless.

China had its cultural revolution in the 1960s and Britain hers in the 1980s. Although the British free market revolution did not produce the huge loss of life that China’s did, it was in some ways equally destructive. Rather than freeing Britain from the shackles of government and liberating the market for the benefit of all, it has created an unregulated market which in essence is becoming a thieves paradise. Only a return to a regulated market that prioritises the creative economy over the destructive economy, can return us to an economy that works for the benefit of all. What I treasure is the Code of Hammurabi which threatened bodily mutilation to profiteers and speculators. He as a successful ruler knew that he would only remain successful, if he reined in the excesses of the market.

The Timely Decline of Britain*

When I started at university I was told by my professors to ignore the writings of Oswald Spengler, Arnold Toynbee and Teilhard de Chardin. The fault with these writers as that tried to impose a false narrative on history. The first two prophesied the decline of the West and in the prosperous 1960’s this seemed obviously false. The latter imposed a Catholic narrative on history. History according to my professors should be the study or recording of historical events, nothing more. Interpreting those events in order to according to some grand schema is to create an incorrect reading of the past – Brexit! (Michael Oakeshott – Experience and its Modes). Perhaps given the mess which is contemporary society, the work of these two historians is deserved of revaluation.

These two historians were not the only writers concerned for the fragility of Western civilisation. In 1920 after the conclusion of the Versailles Peace Treaty, J.M.Keynes wrote the following:

“Very few of us realise with conviction the intensely unusual, unstable, complicated, unreliable, temporary nature of the economic organisation by which Western Europe has lived for the last half century. We assume some of the most peculiar and temporary of our late advantages as natural, permanent, and to be depended on, and we lay our plans accordingly. On this sandy and false foundation we scheme for social improvement and dress our political platforms, pursue our animosities and particular ambitions, and feel ourselves with enough margin in hand to foster, not assuage, civil conflict in the European family.” John Maynard Keynes, “The Economic Consequences of the Peace,” New York: Harcourt, Brace, and Howe, 1920,

Oswald Spengler’s schema of decline can be used to demonstrate that the U.K. is in a downward spiral of decline.

Firstly he dismisses the notion of progress, human history he believes is not one of a linear upward trend, but cyclical. In the 1960s with the rapid recovery from the war, the war of 1939-1945 could be dismissed as a blip in history of human progress. Now after the financial crisis of 2008/9 and the climate crisis, the optimism of the 1960s seems misplaced.

These quotations from the Decline of the West seem ominously prescient.

“I see, in place of that empty figment of one linear history which can be kept up only by shutting one’s eyes to the overwhelming multitude of facts, the drama of a number of mighty Cultures, each springing with primitive strength from the soil of a mother-region to which it remains firmly bound throughout it’s whole life-cycle; each stamping its material, its mankind, in its own image; each having its own idea, its own passions, its own life, will and feelings, its own death. Here indeed are colours, lights, movements, that no intellectual eye has yet discovered.

Here the Cultures, peoples, languages, truths, gods, landscapes bloom and age as the oaks and the pines, the blossoms, twigs and leaves – but there is no ageing “Mankind.” Each Culture has its own new possibilities of self-expression which arise, ripen, decay and never return. There is not one sculpture, one painting, one mathematics, one physics, but many, each in the deepest essence different from the others, each limited in duration and self-contained, just as each species of plant has its peculiar blossom or fruit, its special type of growth and decline.”

― Oswald Spengler, The Decline of the West

“You are dying. I see in you all the characteristic stigma of decay. I can prove to you that your great wealth and your great poverty, your capitalism and your socialism, your wars and your revolutions, your atheism and your ­pessimism and your cynicism, your immorality, your broken-down marriages, your birth-control, that is bleeding you from the bottom and killing you off at the top in your brains—I can prove to you that those were characteristic marks of the dying ages of ancient States—Alexandria and Greece and neurotic Rome.” ― Oswald Spengler, The Decline of the West

Oswald Spengler was criticised for stating the obvious, that at some stage all civilisations go through the cycle of rise and fall. However what he does is that he tells a story worth repeating, and that is that the complacency and optimism of our leaders is not justified. He reminds as that Western Civilisation is not uniquely privileged, it cannot avoid the fate common to all civilisations that of decline and fall. When our politicians fail to heed reality and continue to act as if the prosperity and wealth of the West is a historical given, and that the progress is inevitable they are ignoring the lessons of history. Gordon Brown’s infamous statement that we have ‘abolished boom and bust’, which was shown to be fallacious by the financial crash of 2008/9, is typical of the misplaced optimism of all political leaders. More recent are the over optimistic claims of national regeneration made by Brexit favouring politicians.

Politicians assume our industrial civilisation will go on for ever and that progress is inevitable. What Spengler reminds us is that all civilisations eventually run out of rope. They plough just one furrow, exploit one idea and just as a field that is constantly ploughed becomes exhausted, so does a civilisation. Unavoidable climate change suggests that Western industrial civilisation is reaching its end game.

Spengler was greatly influenced by Nietzsche and the concept of the will to power. For him Western Europe had lost its dynamism. The idea that drove Western civilisation forward was being lost. Benedetto Croce saw liberalism as the great idea that drove Western civilisation forward. Liberalism was the zeitgeist of Hegel’s history. Those regimes that resisted liberalism, the German Empire had fallen, swept aside by the liberal democracies. If liberalism is the great idea of Western civilisation it is certainly dying. Britain as one of the bastions of liberal democracy is failing, and falling to a would be authoritarian populist. Nothing better demonstrates the decline of the liberal idea, than the Liberal Democrat party in coalition with the Conservatives voting for the most illiberal of policy measures. The restriction or denial of justice, through changes to the legal system that either restricted or denied access to the courts for millions.

Today’s political culture has as Spengler predicted lost its dynamism, the will to power has been extinguished. Rather than face today’s harsh realities or speak of future promise, leaders of the major parties wallow in nostalgic myths. On the right they wish for a return to the days of the 1950s, a time of monochrome culture and the false certainties f that time. The left desires a return to a romanticised past, a time when they part of a movement that encompassed that sturdy band of brothers the industrial working classes.

When he declares ‘optimism is cowardice’ , he describes all to accurately the reality of today’s political progress. Politicians always prefer to put an optimistic gloss of policies, but today’s politicians not only put a gloss on there policy, but garnish it with the most outrageous lies. When deception and deceit rather than hard truths are medium of political debate, a country is heading for the precipice as failing to acknowledge unpleasant reality are incapable of taking action to avoid the most catastrophic of futures.

There is one further quote that is of relevance to the decline of the U.K.“Through money, democracy becomes its own destroyer, after money has destroyed intellect.” Everybody knows that the catastrophic crisis of 2008/9 was caused by the collapse of the financial markets in Western Europe and the USA. What few realise is that the West is threatened by a new financial crisis, one due to the over indebtedness of our business corporations.

Cost benefit analysis has replaced reasoned policy making, every policy is claimed to deliver a cash advantage. To paraphrase Oscar Wilde politicians know the price of everything and the value of nothing.

This is my selective reading of Spengler and it is open to objection. Have I cherry picked stories from the national narrative to prove my point? In my defence I would argue that the evidence of national decline is so overwhelming that it was necessary to be selective.

All my examples are British does my ethnocentric reasoning make my conclusions about Spengler invalid.

If we are in decline is it necessary such a bad thing? Vienna of 1900 was the capital of an empire in decline, yet it had a flourishing artistic culture – Mahler, Klimt.

Britain has been in relative decline since the 1850s, now there is evidence that the decline may be becoming absolute. Increasing numbers are employed in low cost, low productive industries, as the British economy is increasingly unable to provide well paid highly skilled jobs for its people. Also Britain is a trading nation whose prosperity depends on international trade, now we have a government determined for wrong headed reasons to restrict British businesses access to international markets. If decline is absolute how should we respond?

Robert Skidelsky suggested economic history provides the best guide for current economic policy making, so should politicians look to history to provide a guide to policy making. Certainly politicians and journalists seem ignorant of history as demonstrated in The Spectator article that stated that Joe Biden would be a friend to Britain became his ancestors were Irish – Irish emigrants forced to leave Ireland because of the great famine of the 1840s!

When today I read that the government is considering the purchase of an £190 million royal yacht HMY The Duke of Edinburgh, I felt that I now lived in a Ruritanian European offshore island.

There is a BBC Radio 4 broadcast on Oswald Spengler and ‘The Decline of the West’, which I can recommend.

*Timely decline- as the British people have been complicit in the nation’s decline by voting for politicians and policies that hasten that decline.

Tearing it up by the roots – a new approach to economics

Michael Gove dismissed the profession of economists, as one of those unnecessary groups of professionals, who stopped the common sense will of the people from prevailing. Although Michael Gove knows little of economics and the value of his statement can be questioned, he is right to suggest that something is rotten within the economics profession.

Just as Karl Popper looks back to Parmenides (early 5 BCE) as the originator of the modern scientific discourse, I believe that the same philosopher can be used to demonstrate the failings of contemporary economics. Parmenides has a vision in which the Goddess reveals to him two separate worlds that of truth which is known only to the Gods, and the world of shadows and falsehoods known to man. Man can only glimpse but shadows of truth, he can never know. Certainty is only known to the Gods. What Popper understands from this is that scientific inquiry can never know certainty, truths known today will be demonstrated as false tomorrow. Scientific truths are conjectures which should be in a form that makes capable of refutation. It is this verification process that makes possible the advance of science as new and better truths replace those of today and yesterday. However he does suggest that these founding fathers are giants on whose shoulders we stand to advance. They make the initial discoveries that make possible the advance of science. Today Newton’s cosmology and theory of gravity are regarded at best partial truths. Yet without Newton’s discoveries Einstein and the advances of modern cosmology would be impossible.

What Karl Popper believes is that there can be no certainties only probabilities. The latter being an admission that we don’t know. Contemporary economics ‘does know’ it knows certain truths about the economy. There are two fundamental truths and they are those of the market economy and modern monetary theory. These are the two foundational principles that underpin all contemporary economics..

Market theory is often referred to as Neo-liberal economics. This theory asserts that the free market is a self regulating organisation, which if subject to minimal government interference will find its own level of equilibrium. Governments that interfere and over regulate the economy risk upsetting the balance of forces in the economy, that determine the best of all possible outcomes for all. It was Alfred Marshall (1840 – 1924) who demonstrated the truths of market economics with the supply and demand theories with which all students of economics are familiar today. Familiarly known the diagrams that demonstrate the ‘Marshallian Scissors’. Nearly all economic theory is a derivation of market economics.

Perhaps the most notorious is Says’ law of incomes. This states that it is self defeating to try to maintain wage levels during a recession, as this will merely increase unemployment through making workers to expensive to pay. Far better to let wages fall to a level at which it becomes profitable for firms to employ workers. These newly employed workers will spend the wages they receive, which will increase demand and kickstart the recovery. With the economy growing wages will return to their former high levels, as newly profitable firms bid against each other through paying higher wages to attract workers from the diminishing pool of unemployed labour. No government will ever admit to following Say’s law, but it is implicit truth, as they are always concerned to avoid the situation in which high wages make workers unaffordable to employers. When Tony Blair introduced the minimum wage he took great pains to ensure that it was not set at a too high a level, as that would make labour too expensive to employ.

A common sense truth which seems obvious to all. However there is very little economic evidence to demonstrate the truth of this ‘common sense’ theory.

The other great truth of orthodox economics is modern monetary theory (now associated with Milton Friedman). This quite simply states that the level of economic activity is determined by the quantity of money in the economy. Increasing the quantity of money in the economy increases the number of purchases people make, so increasing the level of economy activity. However if the quantity of money is increased too much, there is too much money chasing too few goods and so inflation occurs. All the government needs to do to control the level of economic activity is to either change interest rates or the supply of money (so called Quantitive Easing). Although this theory is associated with Milton Friedman he was merely putting the ideas of Irving Fisher (1867-1947) into a more modern format. This school of thinking in fact has a long history, as it’s origins can be traced back to Copernicus who first gave it form 1517.*

Unfortunately modern monetary theory has one flaw, if if the government is to control the supply of money, it must know what it is controlling. Unfortunately it does not. When the Treasury introduced this policy in the 1980’s, I think they came up with seven different definitions of what constituted money. In practice they adopted one definition, M4 as the most likely one. Despite this flaw in the theory, governments have since the 1980’s all been practitioners of modern monetary policy. Never in academic circles will you hear this criticism mentioned.

J.M.Keynes and the economics named after him is regarded as an aberration and no longer regarded as one the foundational truths of economics. The British Treasury the fount of all economic truth has long since dismissed his ideas as irrelevant.

What the economists ‘who know’ have in common, is that they possess what that they believe is a bag of tricks from which the appropriate tool can be chosen to fix any crisis. At present the favoured tool is a combination of reducing interest rates and increasing the supply of money through quantitive easing.

Karl Popper influenced me in my choice of names, he does as do I, belong in the school of ‘don’t knows’ or to put it more accurately we believe our respective subjects consist of a series of probable or possible truths which for the present have great utility. As Karl Popper writes that to state that something is a probability is to admit to doubt. Probably the best known advocate of this school is J.K.Galbraith.* As he had no grand theory linked to his name and was dismissive of such theories. Academic economists tended to regard him as not one of them. He was an agricultural economist, who caught the eye of Franklin Roosevelt and who drafted him in to help manage the wartime US economy. He was one of the authors of the post war report into the effectiveness on allied bombing on Germany. They as a group were surprised to discover how little impact it had on the German economy. A fact conveniently overlooked in the Vietnam war.

What discredited him in the eyes of other economists was his prioritising the human factor over any grand theory. While Hayek claimed that the mad speculation that led to the Wall Street crash of 1929 was due to a drying up of legitimate investment opportunities, Galbraith lays the blame squarely on the shoulders of the financiers. The bosses of Goldman Sachs and the other major banks were both reckless and irresponsible. They made huge profits from the foolish and reckless investments made on the Stock Exchange and had no incentive to discourage them. This is illustrated in the example of the Florida property developer who bought swamp land claiming to to be prime real estate. The authorities on the New York Stock Exchange saw no reason to prevent the sale of stock in this fraudulent enterprise. It was just too profitable. In Galbraith’s words the great crash was 1929 was due to the activities of a group of rogue financiers.

Not surprisingly it turned out that Goldman Sachs was involved in similar activities in the events leading up to the crash of 2008. They were fined millions of dollars for selling what they knew to be worthless bonds to their clients.

When I studied economics at university, I was disappointed to discover it avoided the big questions. The issue of distribution of wealth was redefined as the optimum output curve. Any point on that curve represented the best possible distribution of resources within a given community. This as an exercise in logical thinking was impeccable, but it had no relevance to world outside the seminar room. While this ‘economic scientism’ dominates the subject of economics it remains detached from the real world. When Russians during the ‘Moscow Spring’ came to study economics or more precisely free market economics; they expressed disappointment about how little it taught them about the real economy.

After a number of years teaching economics I came to realise that the teaching of economics was about developing the ‘economic imagination’. This was not so much learning the economic theory that relates to a particular scenario, but being creative within the parameters of economic thinking. A Socratic economics in which reasoning is used to disabuse the student of the ‘truths’ of orthodox economics. The conventions of orthodox economics often stand in the way of developing a real solution to the problem. Only the most unimaginative can think that changing interest rates, increasing or reducing money supply is the answer to everything. Any study of the post war management of the economy would surprise today’s readers.Realising a shortage of houses meant that this could lead to a rapid rise in house prices and inflation in the housing market, the government took action to prevent this happening. The annual in increase in house prices was subject to a tax. This of course meant house owners had a disincentive to the over valuation of houses and house prices remained low in this period. This made the majority of houses affordable unlike today.

Again J.K. Galbraith provides an illustration of this in his work in managing the US wartime economy. One of the problems of the wartime economy is inflation. With so much of the nations output requisitioned for the war effort, a shortage of goods in some parts of the economy would lead to a rapid rise in prices and inflation. Galbraith realised that it was not necessary to introduce a national system of price controls, but instead to control prices with the cooperation of the great corporations. Since they accounted for a majority of the nations output, if they could be persuaded to keep prices down there would be no price inflation. All the other medium and small businesses would follow suit, particularly if they were suppliers to the major corporations.

Economics suffers from one problem that is unique to it. What is true yesterday may not be true today. The economy is a dynamic institution that is constantly changing. Evidence about what is happening in the economy is from yesterday. There is no evidence, apart of the most impressionist kind about today and none about tomorrow. This is why J.S.Mill said there can be no science of of economics. Given this uncertainty governments prefer to use the old tried and tested methods, fearing that any policy innovation will make things worse rather than better. This Conservative mind set explains why governments never get to grips with the problems that plague the economy.

The consequences of adopting the ‘economics of don’t know

Universities would change, economics departments would have to teach students to think creatively. Old dead economists, the founding fathers of the subject would no longer dominate the curriculum. The subject would become more open ended, there would now be no arbitrary limits to subject knowledge. All the old certainties associated with this subject would go. Current academic economists would resist any change, as the knowledge they hold so dear would no longer be valued. University departments of economics would revert back to the liberal humanism of the past.

Resistance to this change would not just come from current academics, but also government. University education is now a commodity that is bought and sold. All the current means that are used to measure a universities output would cease to work. Creative and innovative thinking does not lead itself to the current system of box ticking. Governments would lose the main means through which they control what is taught in the universities.

The two greatest employers of economics graduates the investment banks and the Treasury don’t want graduates who think. They want them versed in the ways of the old economics, together the statistical skills acquired in the study of the old economics. This is the problem already known of, when Manchester students demanded a radical change in the economics syllabus, they had to contend with the fact that they would denying themselves lucrative employment in the world of banking.

Economics can be one of those subjects has to be endured and best soon forgotten on leaving university. What I am suggesting would lead to a revolution in the teaching of economics, it would now be a subject that valued creativity, rather than conformity amongst its students. If instead of discouraging students from continuing an interest in the subject, economics would be one of those stimulating subjects whose students would now retain a life time interest. Since so many MPs have studied PPE at university, those MPs would be better informed and rather than parliament collectively demonstrating an ignorance of the subject and debates on the economy and its management would be better informed and enlightening.

Politics would have to change, Chancellors such as Rishi Sunack and the Treasury itself would have to adopt evidence based economics. Rishi Sunak could no longer quote the truths of the founding fathers as justification for his policies. In constructing economic policies real thinking would be required, as real answers to problems would be required. I look forward to the day when any politician is laughed at when they turn to the old economic pieties to justify there ill thought out policies.

* J.K.Galbraith would probably be horrified to know that I consider him the doyen of the economists who don’t know. I include him because he is one of the few economists, unlike many economists does not know the answer before he starts the investigation. He possesses no ready made answers.

The dogs opinion – letter to my daughters 1

I have reached that time in my life when I find it impossible not the look back on my life and reflect on it. What I don’t intend to do is pass on my wisdom to a younger generation, all too often age is confused with wisdom. There are plenty of foolish seventy year olds around, certainly in sufficient numbers to disabuse me of any notion that age might in some way equate to wisdom. Instead passing on my tenets of wisdom, I make will some observations on life in general.

Kierkegaard is one of the most profound observers of humanity. One of my favourite sayings of his, is that public opinion is the dogs opinion. What is often claimed to be received wisdom is often nothing more than a series of fallacious understanding believed by the majority to represent truth. There are many occasions when society is swept by new and compelling misunderstandings of society and human behaviour. I say swept because even the most intelligent of people feel obliged to subscribe to the current nonsense that will now pass as accepted wisdom. Brexit Britain and Nazi Germany can be used to illustrate how public opinion can be corrupted

National socialism was the passion that gripped Germany in the 1930s. Jews, Jewish thinking and Jewish ways of behaviour were held have corrupted Germany society and to be responsible for the malaise into which Germany had sunk. Germany to recover its national health and natural vitality had to rid itself of this alien virus. A return to the Germany of folkloric heroes, men and women the becoming equals of the heroes Nibelungenleid. Once Germany was freed of the alien virus of Jewish cosmopolitanism this happy result would be achieved.

Brexitism is a nationalism similar to nationalism which swept through Germany in the 1930s, both identify an alien virus as being responsible for national decline and decay. Although in this example the alien virus is Europeanism, our national spirit Brexiteers believe has been sapped and fatally weakened through contact with European cosmopolitanism. Just as with the Nazis the solution is to eradicate this virus from U.K. society. What is proposed is a violent break with the greater Europe or the EU. Britain will be returned to splendid isolation on the of an island situated on the edge of Europe. Geographically European but politically anything but.

Not surprisingly the government’s of both countries adopted similar solutions to this problem. Expel those responsible for spreading the virus. Although the expulsion policy was less brutal in Britain, it is in essence it is similar to that of the Nazi’s. If people are denied to right to work and reside in the country, they will leave. In Britain it has been this has been enforced through the hostile environment which denies Europeans the right to remain in this country, while in Germany it was the violence of the brown shirts.

Brexitism is a nonsense, but a nonsense that is increasingly held by the political elite. A nonsense that is beginning to permeate all levels of society. In the 1960s it was believed that the quality of parliamentary democracy would be improved by the influx of educated graduates as MPs. Yet it is these very people that have become enthusiasts for Brexit. It is as if are governing classes are gripped by a religious fervour, a fervour that prevents them accepting anything contrary to their belief system.

The parliament of local squires and trade unionists of the past so derided by political commentators in the 1960s; was the one that withstood the fascism of Mosley and his blackshirts and resisted Hitler in the dark days of 1940. Today’s parliament of graduates (often educated at the elite universities) have surrendered their integrity to nothing more than a media campaign led by a group of populists.

Nietzsche despite being claimed as one of there own by the Nazis was nothing of the kind. He was a fierce critic of German nationalism seeing it correctly as yet another non thinking belief system of the majority. It was for him the wisdom of sheep, the herd instinct, the wish to fit in and be the same as the others. An unquestioning desire to live like others. This is why he opposed democracy, believing that it would give power to the undistinguished middle classes. As today’s parliament is drawn overwhelmingly from the middle classes, it is worrying to think that Nietzsche might be right. The next Prime Minister is criticised for being a follower of public opinion. In the words of one critic he sees which way public opinion is going, and then rushes to the front saying follow me. If this critic had been brutally honest, he would have said that the same is true of the majority of MPs. Unfortunately we are led by a parliament of sheep that are constantly looking for somebody or something to follow. Prior to the referendum of 2016 the parliamentary sheep believed that public opinion favoured remaining in the EU, now although by a small margin public opinion was demonstrated to be the contrary, these sheep switched sides. Truth they believe resides in majority opinion.

Returning to Kierkegaard he believed that it did not matter, if only one man believed the truth. The truth was the truth no matter how many believed it. Therefore it was of no consequence, if what the majority believed was wrong. He took this belief to extremes, believing that the Danes were insufficiently Christian lived a life contrary to the mainstream, provoking controversy about his person hoping his example would lead Danes into changing their lives. His appearance helped in his task as he looked distinctly physically odd. One leg seemed shorter than the other, his badly fitting trousers gave that impression. He tried to be a Danish Socrates button holing people in the street and engaging them in a conversation through which he demonstrated the unsoundness of their beliefs. As a figure of controversy and mockery, he certainly was a lone speaker of Christian truths. The isolation and mockery made him convinced that he was a martyr for the truth. He found this martyrdom unpleasant, but thought it necessary to bring Danes to a sense of the truth. Although his martyrdom failed to change any minds, his books did for so later generations, who appreciated his unique approach to truth.

What Kierkegaard and Nietzsche shared was a scepticism of the received truth. This isolated them from there fellow men. Truth is often more offensive to people that the accepted lies by which live their lives. A knowledge of the thinking of the sceptic philosophers is the best protection against the fallacious enthusiasms that periodically sweep through society which carry others away. I cannot believe that anybody schooled in scepticism can believe in nonsense, such as that preached by our Brexiteers.

Why the economic crash of 2008 will not be the last such financial crash.

As an economist I know of several explanations of why economies experience sudden and unexpected down turns, the usual explanation is the bursting of a credit bubble as happened in 2008. These downturns or crashes are always claimed by our political leaders to be unpredictable events, once in a life time happenings, even an ‘act of God’. Even when as in 2008 when the crash was caused by both human folly and greed. This misunderstanding is only possible because politicians have never understood the economics associated with John Maynard Keynes. He stated that economies are inherently unstable and these sudden and unexpected collapses in economic activity are part of of natural economic cycle. Unfortunately politicians act as if the good times will continue forever, a dangerous self delusion.

Although an economist by education, I am a philosopher by interest. Unlike Keynes I want use the techniques employed by the Greek philosopher Plato to explain the instability of the economy. He used myth to explain those aspects of reality that were not easily given to rational explanation, myth could make understandable, what reason could not easily explain. Perhaps the myth of the cave is the best known. A myth he uses to explain the ignorance of mankind as to the true nature of reality. He says imagine mankind as a group of individuals chained up in a cave. These chains prevent them moving and force them to look in one way only forwards.. In front of these men is a wall behind which is a fire. Now behind that wall images of things are passed backwards and forwards, so all the chained men see is a series shadows, which they take to be reality. Mankind for Plato could only see the world of appearances, which obscured the true nature of reality. However as I’m a 21st century economist who does not believe in myth, I will use metaphor as a substitute for myth.

The economy can be seen as a jigsaw puzzle in which the pieces seem to fit together to form a picture,. It’s seems to be composed of a series of interlocking pieces that fit together to form an integrated whole. However closer inspection of the puzzle reveals that the pieces do not fit easily together. There are gaps between the pieces they don’t easily fit together. Now if the tray on which the pieces are resting is moved, the puzzle immediately begins to lose shape and the picture eventually disappears from sight. The economy can be seen as a badly formed jigsaw puzzle that is likely to falling apart at any disturbance. Politicians ignorant of economics constantly make foolish decisions, that disturb and disrupt the economic policy. Occasionally they make disastrous decisions that cause the economic puzzle to fall apart,

There have been in our recent history a series of such foolish policy making from our political leaders. The most common fallacious policy is to promote speculative boom in either the property or stock markets as the main driver of economic activity. It is the fools gold of a policy. If economic growth is dependent on a constant inflation in house and property prices, there will be a time when market confidence fails and asset prices collapse and with it the economy. Unfortunately this simple understanding of the economy is beyond the political classes. Politicians seem predisposed to believe that everything in the garden is rosy and nothing bad will occur. A recognition of the fragility on which economic well being is based is too disturbing and unsettling to be accepted as a truth by our blindly optimist politicians.

The jigsaw metaphor can be used to explain how policies should be made to fix an economy, once a downturn has occurred. The broken puzzle can be put together through decisive political action and the economy rebuilt. There might have to be some reshaping of the pieces to make them fit together better, so making the economy more resilient to future shocks. Obviously the one piece that needs to be reshaped is the property and financial markets. Action needs to be taken to limit the activity of speculators in each. This action is a system credit controls and taxation that chokes off any foolish speculative activities. Unfortunately the politicians seem to believe that remaking the economy is an impossible task. What they prefer is the maladroit tinkering that is called Neo-Liberalism or leaving the market to fix itself. This is akin to asking these malformed pieces that remake up the economic puzzle in their own image. As a consequence the speculative economy that caused the collapse of 2008, has been rebuilt by the dominant players in the market, bankers and financiers with minimal interference from the government.

I must confess to one failing which is typical of all economists, I find it much easier to explain why economies go wrong than why they go right. My jigsaw metaphor cannot explain why the economy is subject to exuberant and unexpected periods of rapid economic growth. Perhaps if economists such as I could explain this economic fact, the economy would be in a better position than it is now.