Category Archives: scepticism

A Country Ghost, the Devil’s Chair and Other Stories

What has been lost from the countryside is the art of spinning a yarn or the telling of tall tales. I grew up in a time prior to the modern media age and the entertainment we valued most was story telling. We children loved it when my father had a friend call who was an adept story teller. Although there was some truth in these stories they were considerably embellished through constant repetition and could contain fantastical elements. Country folk used to love story telling, particularly when the audience included some credulous outsiders.

This credulity could be exploited for profit. A friend of my father’s was a farmer. He had been contacted by a television company who wished to film on his lands some scenes for a television programme on Jorrocks, the nineteenth century huntsman. When they had set up the jumps for the horsemen, they were interrupted by a shout of that’s all wrong after the first jump. This very helpful farmer told the producer and assembled cast that Jorrocks would never jump in the manner they had done. After several jumps with the guidance of the helpful farmer they began to jump in the manner of the Victorian huntsman. Once they had achieved that, the very helpful farmer noticed that the costumes and tackle they were not those that would be used in the nineteenth century. He gave them his help in securing the correct tackle for the horses and the right costumes for the huntsmen. What had intended to be one days shooting, became for the farmer a profitable three days of filming. What the television producer never realised was that this farmer knew less about the historical Jorrocks that they did.

After this diversion I want to get back to my intended story, that of country ghosts. The estate on which I lived was owned by a very wealthy American family, who had become British over the generations. When the first American owner bought the estate, he invested part of his wealth in improving the estate. He added a maze to the grounds, topiary chessman and an Italian garden. The grounds around the castle were turned into a pleasure garden. One such added feature were the walks and one such walk was Anne Boleyn’s walk.

The castle had once been owned by Anne Boleyn’s father. It was doubtful that she had spent anytime there with her lover Henry VIII; yet the thought that she might have appealed to the new owner. The walk was a long walk between rhododendrons and other scrubs. In early summer it must have been a delightful to walk between the flowering shrubs. When I knew the walk it had largely fallen into disuse and looked rather neglected. It had a markedly gloomy and spooky appearance which is perhaps it was why it gave rise to a local ghost story.

Stories circulated amongst the castle staff that the unfortunate Anne Boleyn could be seen at night walking there with her head in her hand. The fact that the castle staff at night attended the pub situated at the edge of the castle grounds, I think aided the development of the stories about this ghostly apparition. According to local legend an Italian valet was employed at the castle. This man was easily persuaded of the existence of this ghost. One night he was persuaded to walk along Anne Boleyn’s walk to see the ghost. Another of the servants had dressed in a sheet to look like a ghost. I don’t know what he used for a head, but he certainly had one under his arm. Then when the valet was walking along this path, this ghost jumped out from between the bushes. The scared valet ran away and gave his notice the next day.

I say local legend because staff would play such tricks on one another, but I doubt that even the most naive of Italian valets would be fooled by the disguise. What made the story believable was that it was a trick played on an incredulous outsider. Everybody in the village knew that only an outsider would be taken in by such a trick. However from such beer talk the legend grew. Certainly when I was a child the story of Anne Boleyn walking the grounds was widely known and of course disbelieved. It became something of a local custom, that some locals when fortified fortified by the consumption of beer would do the walk to see if they could see the ghost. Only after a number of these beers would these people think it worth their time to look for what they really knew was a non existent ghost when they were sober. All the estate was sceptical about Anne Boleyn’s ghost, but it was an amusing story to relate to credulous visitors.

Now the myth of Anne Boleyn walking the estate is widely accepted. I suspect mainly to encourage visitors to come to the estate. Since my childhood the walk has been transformed and now looks like it did in its heyday. Yet many thousands have now walked along that path to share in the vicarious pleasure of walking the same path as Anne Boleyn’s ghost.

There was also the story of the devil’s chair. At a nearby village there was a chair in which the devil had been reputed to have sat. Any unfortunate that sat in the chair would be certain to die the next day. Whatever the source of the story it was one popular with locals. However I can express some credulity about the story, as after a few drinks the locals would forget which was the devil’s chair and somebody would mistakenly sit in it. None of them can I recall ever died from doing so. After a nights drinking nobody was quite sure which of the chairs the devil sat in and I’m sure the devils chair was a different one each night. If fact I know that none of the local adults took the story seriously. However it was a story the landlord promoted to encourage trade.

What I think was the true source of the story was this. A landlord wanted to devise a way to stop children coming into the pub, because he only wanted adult drinkers in the bar, as children distracted the men from the serious and profitable activity of drinking. He came up with the story of the devil’s chair to scare away the children. It certainly worked because all of us children were too scared to enter the pub. From that simple ruse it developed into what became a well known local legend.

As a former countryman proud of his roots, I prefer to believe all such rural ghost stories had a practical origin. If outsiders from the town took them seriously, so much the better. Much pleasure was derived from duping our sophisticated urban cousins. The man who appeared to be an ignorant country yokel was all to often one of the village wide boys testing the credulity of an outsider with an increasingly series of incredible stories.

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When a visitor encountered the philosopher Democritius* in his garden, he to his surprise found him laughing uncontrollably. When asked why he was laughing, he said it was at the follies of mankind. If Democritius was living today he would have found plenty to laugh at in the follies of our leaders.

One of the more interesting of the Greek philosophers was the sceptic philosopher Pyrrho. This was a man so sceptical about the possibility of there being such as human knowledge, that he did not bother to look where he was going went he went walking, as he thought that if he was going to fall into a ditch there was little he could do to prevent it happening. While this story recounted by Diogenes Laërtius is apocryphal it does illustrate quite clearly the nature of his thinking. As all human knowledge was fallible, he said that we should be wary of putting too much trust in the great systems of the philosophers that claimed to ‘explain everything’. Why I value Pyrrho is he an  antidote to stupid thinking. Whenever I contemplate the latest popular fashion in contemporary thinking, I always think of Pyrrho. I am wary of the latest popular enthusiasms, whether it be for hygge, Gloop the philosophy of Gwyneth Paltrow or Neo-Liberalism, as on examination they all seem to rest on similarly filmsyl foundations.

Unfortunately politicians with a naive belief in rightness of free market economics are particularly prone to such stupid thinking. The politicians of the New Right,  despite their claims to realism are often the enthusiasts for the silliest of ideas. One such is the idea that the when the UK leaves the EU it can install an computer based system to record all foreign trade transactions. This scheme will operate so efficiently it is believed, that traders will find litle difference betwen the new trading system  and the current regulation free trade system. Traders will find it as easy to move goods in an out of the country as they do at present. The only flaw is that there is no such system anywhere in the world and the record of governments installing new computer systems is one of failure. This government has spent seven years trying and failing to introduce a computer system to pay benefits, the much derided universal credit system. If this scheme in which all the recipients of this benefit are already known and yet the government finds it impossible to get the scheme to work effectively, how can it possibly develop an IT scheme that will be able to handle the thousands of daily transactions that make up our international trade. Already the fallibility of the HMRC computer system enables thousands of people to avoid paying tax. Yet even although they know this, these Brexiters claim that they will be able to introduce a new marvellous IT system which will have none of the failings of any of its predecessors.

What Pyrrho would have advised these politicians and economists of the New Right to do; would have been to look at the past history of government failure in the procurement and introduction of new IT systems. This would have reminded the Brexit enthusiasts that there has never been a government IT scheme that has not been a magnificent failure.

If they were not convinced by that, he could have told them to look at the problems of IT in the defence system.  The operating system in our new aircraft carries is Windows XP, an operating system so outdated that Microsoft has stooped supporting it with updates. The vulnerabilities of this operating system were exposed when hackers (from North Korea)? were able to shut down so many of our hospitals that relied on this as an operating system. Also the broadband speeds available to these carriers does not exceed 8mb, a speed slower than most household broadband systems.  Pyrrho would have told these politicians to stop being foolish and indulging in stupid fantasies and instead address the reality of the real world of flawed computer systems.

Why blame economists when all the failures that I have outlined are those of the politicians? Quite simply because all these politicians of the New Right and our Brexit are believers in the economic philosophy called Neo-Liberalism. Neo-Liberal thinkers such as Friedrich Hayek and Milton Friedman have taught that mankind has invented the best possible of social institutions and that is the free market and that the role of politicians is merely to ensure the smooth operating of this market.

It would be anathema for these politicians to install customs barriers at our sea and airports, as that mean introducing a barrier into the smooth working of the free market. Their philosophy then poses for them an unsolvable problem. Having decided that the UK must leave the free trade area that is the Single Market and the Customs Union, how do they introduce customs barriers that are not customs barriers? They know that once they introduce customs checks on imports and exports at Dover, they face the possibility of there being long tailbacks of traffic. Some estimates state that these queues will be up to 15 miles long. Now having introduced a problem that has no solution, they resort to a fantasy answer. The IT system for exports and imports that they propose only exists in the realms of their imagination, it is incapable of an existence in the real world. Its nonsense but nobody in government wants to admit to this.

What puzzles me is the great majority of these politicians who are enthusiasts for this scheme studied philosophy at one of our elite universities as part of their Philosophy, Politics and Economics degree. Even although scepticism is not the fashionable mode of philosophy in our universities, philosophy departments do boast that they teach their students critical thinking. Obviously our politicians of the New Right seem to think that this is a skill that only applies to essay writing.

*Democritius was a philosopher who lived in the fourth century BC in the cityl of Adbera, Greece.

Contemporary Britain, a country dominated by Nietzsche’s untermensch (under men)

Nietzsche hated democracy because it makes possible the rule of the common man and the suppression of the superman. A term that Nietzsche uses to describe the common man is untermensch or underman, a term which was open to misunderstanding and abuse. What he meant by the untermensch was a man who lacked the potential to live the life of a ubermensch or superman. What was never understood was that for Nietzsche the distinction was based on intellect and character, not power or physical strength. Originally he named the saint, artist and philosopher as his supermen. Even his dislike of Christianity as the religion of slaves did not stop him admiring Christ as a possible superman. He admired Christ as a founder of a religion but despised Christians for slavishly following the beliefs of another. What I think is most useful is his description of the untermensch as those in thrall to a slavish culture. People incapable of independent thought. When I look at the British parliament and the legislatures of other Western nations it seems obvious that we live in an age of the untermensch.

What the untermensch share is a slavish adherence to a common culture which means that politicians of whatever political stripe, will all give the same replies to questions on policy. These are a few examples which demonstrate this clearly.

In Britain the housing market is broken and many people are forced to live in private rental sector. Properties in which they have no security of tenure and for which they pay ever increasingly exorbitant rents. Whenever it is suggested that these tenants should be given security of tenure or have their rents controlled, the same parrot cry comes from politicians, whether of the parliamentary left or right, that such controls would only make matters worse. They claim that such controls would force landlords to withdraw from the market, reducing the number of properties for rent and so making the situation worse for tenants.

Britain’s railways are the most expensive and some of the least efficient in Europe. When it is suggested that these railways should be taken out of private ownership and returned to the state, it meets with howls of derision from the collective parliamentary body. Everybody in parliament knows that the state is peculiarly unfitted to run business and businesses such as the railways are best left in private hands. The solution to the problem is as every parliamentarian knows is to transfer the railway franchises to more efficient private owners.*

There are many other examples of the politicians collective thought that could be mentioned. What is common to these practitioners of politics is a hatred of those that think independently, they expel or seek to suppress from the collectivity of politicians those who think differently. At present the parliamentary Labour party is seeking to purge itself of a leader who thinks differently. A glance at the politics of contemporary Europe provides evidence that those who think differently have no place in the mainstream political parties, they have to come from insurgent parties such as Podemos in Spain or The Five Star movement in Italy.

One common place truth of contemporary political analysis is that the political elites have lost touch with the people. It is a resentful and sullen people that turn to the populist parties of the right. These parties at leas recognise the pain of the people, something that the political parties of the left fail to do. Durkheim called socialism a cry of pain, the parliamentary socialist parties of today no longer this truth. Rather than ignoring the people, parliamentarians are following a culture that denies the validity of other expressions of the truth other than its own. Truths that might appear obvious to the people are to politicians merely uninformed opinions.

Another demonstration of the untermensch mentality is the slavish following of opinion polls. Rather than leading, politicians prefer to follow, all to often they are prepared to abandon their principles because the people as expressed a different views to theirs in an opinion poll and the peoples will  must be respected. Never do they consider that they are elected to lead the country, they prefer to follow.

The language of politics is so often that of the untermensch. One of our most popular newspapers is said to ensure that all of its content can understood by the average thirteen year. It does not tax its readers with difficult text or content. Similarly our leading politicians prefer the language of the thirteen year old which are  expressed in what are meaningless phrases or slogans. Our current Prime Minister is campaigning for re-election with a series of simple phrases, such as that she will provide ‘strong and stable government’ as opposed to the opposition who represent a ‘coalition of chaos’. She it seems feels no need to present a detailed and reasoned manifesto to the electorate.  A vague and rather meaningless manifesto will suffice and that is all she and her advisors believe is necessary is a few repeated slogans to get out the vote.

Defenders of the present political system will argue that the overwhelming majority of parliamentarians not only went to university, but elite universities and got good degrees. However the very intelligent can be members of the untermensch, as its a mentality or way of thinking and it is as much about  character as intellect. Politicians rarely stray beyond the party line or parliamentary consensus of views, they sacrifice their individuality on the altar of group think. What Nietzsche’s supermen do is to challenge the conventional thinking of the time. When politicians continually speak and think in the language of the average thirteen year old, it cannot but deform their personalities. What at first becomes a means of communicating with the masses through does through constant repetition become incorporated within their personality. They take some of the characteristics of what they affect to despise, the common or under man.

While I think that Nietzsche’s understanding of British democracy is correct today, it has not always been the case that the British parliament promotes the mediocre at the expense of the talented. Today parliament has been overtaken by the culture of the untermensch, whether its expressed in terms of loyalty to the one’s party, obedience to the will of the people or submission to the dominant Westminster belief system. In previous times there has been a much more vigorous culture at Westminster, one in which individualist thinkers could thrive and even achieve the highest office. What is needed is an ending of the stranglehold on Westminster culture of the parties of the consensus, then politicians of an independent mindset will begin to flourish there.

There are those who will have a different understanding of Nietzsche’s concept of the superman. Mine derives from the earlier writings of Nietzsche, as his understanding of the superman did change in his later writings. Obviously those who have read ‘The Will to Power’ a book created by his sister out of his notes will have a very different understanding. Personally I think that this understanding of Nietzsche’s superman is invalid and of little intrinsic merit.

* Any independent minded economist could easily expose the flaws in such thinking.

Brexit myths 1 -that the rich well off campaigners for leave have nothing to fear from leaving the EU

What the financiers, right wing politicians and business who have backed Brexit believe is that they are immune from any of adverse consequences that might result from Brexit. A belief that can be rephrased as follows that, ’bad things don’t happen to the rich, only to the poor’. Only a person completely ignorant of the past and past economic crisis can believe such nonsense. These people  are of a generation that has no knowledge of the great economic depressions and financial crashes of the past. My generation of economists were told stories of financiers jumping out of the window of their offices to their death, as they could no live with the consequences of their business  failures and lost fortunes. Although this was a popular myth as Galbraith writes in his book on the great crash of 1929, what it does is through a popular myth convey a truth, there were many rich man who saw their fortune disappear with the financial crash of 1929. The Joseph Kennedy’s who had the foresight to get out of the stock market before the crash, where few and far between. After the crash there were many millionaires reduced to relative penury. A fact disguised by the terrible suffering of the less well off who lost homes and jobs, a fact which tended to dominate the popular imagination.

The misplaced confidence of the many rich right wing politicians is in part due to the fact that the crash of 2008/9 left them with their fortunes largely intact. The action of the government and the Bank of England prevented these people from suffering any real adverse consequences from the crash. When banks failed, the government through the Bank of England invested billions in the weakest banks to maintain confidence and preventing  a run on the banks developing and causing a more general  collapse of the market.  All banks and financiers had over invested in the property and equities markets and were at risk of seeing their assets fail catastrophically in value. As a consequence only the most reckless and unluckiest of banks failed, most were left relatively unaffected by the crash. A serious and catastrophic financial crash was averted  through the government being willing to back the banks with whatever money was needed to maintain the banks solvency.

What is not understood is that at the height of the crash the government was willing to pledge most of the country’s wealth to support the banks. Fortunately the credit of the British government was sufficiently high in the eyes of the banks major creditors that this money was never called on. If it had been the British population as a whole would have been reduced to abject poverty as major creditors would have wanted their money and it could only have been provided by taking it from the incomes of the people. The only consolation would have been that if the British economy crashed because the bank’s creditors doubted the credit worthiness of the banks, the world economy would have crashed because most of the developed world’s banks were as unsound as those of the British.

The world economy is subject to regular cyclical downturns, which seem to occur at intervals of every nine years. If this cycle continues as normal, the next downturn is due in 2017. In 2017 negotiations to leave the EU begin and the uncertainty generated by these negotiations will worsen any economic downturn.It is unlikely that the UK will go through 2017 without a significant downturn in economic activity, especially as now the leaked Treasury report on the negative impact of leaving the EU has been published, a report which confirms the fears of those doubting the wisdom of leaving the EU.

Many of the rich Brexiters have invested considerable proportions of their wealth into high paying and high risk financial investments. The high risk element is concealed by the continued upsurge in asset values, which makes all investments appear sound. When interest rates are low and prices are constantly rising it is possible for even the worst of investment managers to make money. What matters is belief or confidence, in 1928 investors bought into a project which promised to build houses on swamp land in Florida. They did not worry about the soundness or otherwise of the project, as they believed that they would be able to sell their investments in the scheme for a  sum higher than that which they invested. The financial markets today are brimming with misplaced confidence so that investment managers are making many investments that are ill advised. Unfortunately the opaqueness of so much financial accounting makes it almost impossible to judge which investment funds are the ‘dogs’ in the market.

Next year if not sooner such financial dogs will be revealed. The bull market will turn to a bear market as the fear regarding the when uncertainty about the future of the economy grows  when it becomes obvious that the Brexit negotiators have no realistic plans for offsetting the negative impact of leaving the EU. The negotiators at present are literally conjuring markets for British goods and services out  of nowhere and when the markets see that there is no substance to the optimism of the politicians prices of all assets will tumble. Then in a falling market the financial dogs will be revealed, some will inevitably be unable to meet their obligations and will collapse. Those unlucky wealthy politicians that have invested heavily in these companies will face substantial losses.* While I can  be very confident that next year, if not this will be one of financial crisis, it is impossible to predict how severe the crisis will be. If the crisis reveals that there are only a few dogs in the market it can be contained. What matters is how the collapse of a number of investment and property funds affects the confidence of the market. In a volatile market which is the financial market,falls can be substantial before the market recovers its nerve. All that can be said is that there will be a number of rich politicians next year who having lost substantial sums of money will be regretting their decision to campaign for an exit from the EU.

* The compensation schemes exist will be insufficient to compensate these rich investors for their losses, particularly as the government will need to spend its money elsewhere to minimise the negative impacts of Brexit.

A Sceptical Economist’s understanding of War and War Making

The sudden rush of enthusiasm for war in Syria made me realise that there is no commentary on the economics of war and war making. What I don’t intend to do is repeat the moral and political arguments on the subject of war making, which others are better qualified to make. The question that I want to answer can economics justify war, is there an economic equivalent of the churches ‘just war’? (As defined by St.’s Augustine and Thomas Aquinas)

  
Image of  Syrian  War taken from  Geopoliticsmadesuper.com
The first thing to note is that there is a peculiarity embedded in the economics of war making. All war materials be they planes or tanks are built to be destroyed. Each item will be used repeatedly until it is either no longer fit for purpose or destroyed by enemy action. War weapons are a very poor investment one that adds little to the wealth of the community. This represents a problem for accountants and economists, how do you value an asset whose only purpose is to be destroyed? The simple answer is that these war weapons are valued according to their cost of production, they can add nothing to the future wealth of society.

There is another strange feature of war weapons that represent their paradoxical nature. They are designed not to be used, the best weapons are those which are an effective deterrent to war. One such weapon is the Trident nuclear weapons system, it works if it’s never used. The government’s of the sixty years have invested vast amounts of money into a product that has never been used. It cannot be stated often enough that the best weapons are those that are never used. This was a policy practised by the British Empire in the 19th century, it always had a fleet of warships that was at least twice the size of twice the size of its rivals. No rival power ever threatened the Empire, because it risked the annihilation of their navy. Trident as a weapon of mass destruction is unparalleled as a weapon of deterrence. Perhaps this is the only occasion in which vast amounts of resources and time is spent on a product that is intended never to be used.
Although military men might object, this is where marketing proves invaluable. It is very rare for these weapons to work as described. One version of the Trident missile was rumoured to be equipped with war heads that could malfunction when in action. There was the Lockheed Starfighter nicknamed the flying coffin because of the regularity with which it fell out of the sky. There are numerous other examples of under performing expensive weapons of war, but the military of both sides keep to the pretence that their weapon systems their super weapons work perfectly well. Given the success of the intelligence services of both sides in discovering the military secrets of their rivals, they must know about the underperformance of their rivals weapons systems but prefer to keep quiet. There is an omertà in the world’s military one that prevents them ever being honest about the poor performance of their weapons systems because that would undermine their credibility as masters of war.There are no marketing men in existence as effective as the generals when it comes to marketing a dud product. 
This is another strangeness of the war market, while military men claim to be men of action, they are more accurately termed men of inaction. The most successful ones never have to do the task for which they are paid. What the good general most wants to do is avoid action and the destruction of much of his military assets. A philosophy best demonstrated in medieval warfare. Then a battle would involve such huge loss of life, that each army would usually lose a third of their manpower in battle, more in the losing army. Therefore medieval monarchs tried to avoid open battle as it would leave their army so depleted that it would be unable to fight another war. When Henry V left France in 1405, the army that remained was so depleted that it was unfit for any further battle. Only the weakness of the French acing lost the Battle of Agincourt, kept this weakened army safe from attack and destruction.
On occasions military men forget the first rule of war, that is not making war. The most recent example was the war on Iraq. There were a number of senior officials and generals in the Pentagon who were eager to test their new weapons of war in combat. War technology was so far advanced in America that these men were eager to test their weapons in combat. While there were other reasons for the Iraq war, the American military and Pentagon officials were desperate for an opportunity to play with their new weapons. When it came to war, American technology was so superior that the war was over in a matter of weeks. However it later turned out that victory was due less to superior weapons technology and more to old fashioned bribery. The Americans had paid the generals of the elite Republican Guard not to fight. The chaos that has been Iraq since 2003 demonstrates why it is foolish to regard the military option as the first and best option. When leaving the Oval Office in 1961 President Eisenhower warned of the danger posed by the ‘military industrial complex’ a danger shown by the Iraq war when the arms salesman were able to push America into a costly and pointless war.
This leads to the first rule of the economics of war, never engage in a war unless the enemy poses an existential threat as the destruction of resources and human life is so that war can never be justified for any other reason. As a British citizen the war against Hitler can be justified as it presented an existential threat to the UK, the wars in the Falklands, Afghanistan and Iraq cannot be justified.
History provides examples of why war is such a bad investment, it is their huge cost. Recently I read a history of Edward I. He was a successful war leader constantly beating his Welsh and Scottish adversaries, yet time and time again his campaigns ground to a halt when he ran out of money. What usually happened was the foot soldiers who made up the majority of the army would desert when the campaign was well under way and approaching a successful conclusion, because they had not been paid. All medieval monarchs were in debt to their bankers, because of the huge sums they had borrowed to fight wars. Today it’s little different money borrowed to finance the campaigns in Iraq, Afghanistan and Syria will be paid by our grandchildren. When I was a student in the 1960s, I was told that the country was still paying for the Crimean War, a war that was fought in the 1850s. War is a fantastically expensive enterprise for which their is little return. 
As a sceptical economist I doubt the value of making huge investments in products that either will never be used or if used destroyed in combat. If I heard the new correctly our government is preparing to invest in a fleet of new fighter planes the F35 at a cost of £100 million a plane. I cannot as an economist see the utility or purpose of investing £10 billion in a product that only has one purpose which is to be destroyed. The cost of the new Trident missile system is estimated at £100 billion or just less than 10% of our annual national income. Why I don’t dispute the value of deterrence in an irrational world I do wonder if it needs to cost so much. Is their an inverse logic that applies to military thinking, which simply stated means the more that is paid for war weapons the more utility and value they possess regardless of their effectiveness? It is often said of the British military that they want gold plated weapons systems. The British and European government’s spent billions developing a warplane that had such poor flying characteristics that it was nicknamed the ‘flying sow’.
There can only be one somewhat nonsensical conclusion, the government has to invest in a product they never intend to use or hope never to use. The investment in military hardware must be sufficient to deter possible aggressors yet never be such as to bankrupt the economy. Perhaps the ideal situation occurred during the Cold War when both the USA and the Soviet Union invested billions in a weapon they never wanted to use, that is the nuclear deterrent. However peace was maintained only at the price of mutually assured destruction (MAD). This however was far from ideal as in the case of the Iraq war warriors, if one group of leaders thought they possessed an advantage over the others, they could be tempted to use their weapons of mass destruction. Perhaps the only solution is for the leaders of the most technologically advanced nation to limit their military superiority over others so no future leaders are tempted to use those weapons in a pre-emotive strike. 

The first thing to note is that there is a peculiarity embedded in the economics of war making. All war materials be they planes or tanks are built to be destroyed. Each item will be used repeatedly until it is either no longer fit for purpose or destroyed by enemy action. War weapons are a very poor investment one that adds little to the wealth of the community. This represents a problem for accountants and economists, how do you value an asset whose only purpose is to be destroyed? The simple answer is that these war weapons are valued according to their cost of production, they can add nothing to the future wealth of society.

There is another strange feature of war weapons that represent their paradoxical nature. They are designed not to be used, the best weapons are those which are an effective deterrent to war. One such weapon is the Trident nuclear weapons system, it works if it’s never used. The government’s of the sixty years have invested vast amounts of money into a product that has never been used. It cannot be stated often enough that the best weapons are those that are never used. This was a policy practised by the British Empire in the 19th century, it always had a fleet of warships that was at least twice the size of twice the size of its rivals. No rival power ever threatened the Empire, because it risked the annihilation of their navy. Trident as a weapon of mass destruction is unparalleled as a weapon of deterrence. Perhaps this is the only occasion in which vast amounts of resources and time is spent on a product that is intended never to be used.
Although military men might object, this is where marketing proves invaluable. It is very rare for these weapons to work as described. One version of the Trident missile was rumoured to be equipped with war heads that could malfunction when in action. There was the Lockheed Starfighter nicknamed the flying coffin because of the regularity with which it fell out of the sky. There are numerous other examples of under performing expensive weapons of war, but the military of both sides keep to the pretence that their weapon systems their super weapons work perfectly well. Given the success of the intelligence services of both sides in discovering the military secrets of their rivals, they must know about the underperformance of their rivals weapons systems but prefer to keep quiet. There is an omertà in the world’s military one that prevents them ever being honest about the poor performance of their weapons systems because that would undermine their credibility as masters of war.There are no marketing men in existence as effective as the generals when it comes to marketing a dud product. 
This is another strangeness of the war market, while military men claim to be men of action, they are more accurately termed men of inaction. The most successful ones never have to do the task for which they are paid. What the good general most wants to do is avoid action and the destruction of much of his military assets. A philosophy best demonstrated in medieval warfare. Then a battle would involve such huge loss of life, that each army would usually lose a third of their manpower in battle, more in the losing army. Therefore medieval monarchs tried to avoid open battle as it would leave their army so depleted that it would be unable to fight another war. When Henry V left France in 1405, the army that remained was so depleted that it was unfit for any further battle. Only the weakness of the French acing lost the Battle of Agincourt, kept this weakened army safe from attack and destruction.
On occasions military men forget the first rule of war, that is not making war. The most recent example was the war on Iraq. There were a number of senior officials and generals in the Pentagon who were eager to test their new weapons of war in combat. War technology was so far advanced in America that these men were eager to test their weapons in combat. While there were other reasons for the Iraq war, the American military and Pentagon officials were desperate for an opportunity to play with their new weapons. When it came to war, American technology was so superior that the war was over in a matter of weeks. However it later turned out that victory was due less to superior weapons technology and more to old fashioned bribery. The Americans had paid the generals of the elite Republican Guard not to fight. The chaos that has been Iraq since 2003 demonstrates why it is foolish to regard the military option as the first and best option. When leaving the Oval Office in 1961 President Eisenhower warned of the danger posed by the ‘military industrial complex’ a danger shown by the Iraq war when the arms salesman were able to push America into a costly and pointless war.
This leads to the first rule of the economics of war, never engage in a war unless the enemy poses an existential threat as the destruction of resources and human life is so that war can never be justified for any other reason. As a British citizen the war against Hitler can be justified as it presented an existential threat to the UK, the wars in the Falklands, Afghanistan and Iraq cannot be justified.
History provides examples of why war is such a bad investment, it is their huge cost. Recently I read a history of Edward I. He was a successful war leader constantly beating his Welsh and Scottish adversaries, yet time and time again his campaigns ground to a halt when he ran out of money. What usually happened was the foot soldiers who made up the majority of the army would desert when the campaign was well under way and approaching a successful conclusion, because they had not been paid. All medieval monarchs were in debt to their bankers, because of the huge sums they had borrowed to fight wars. Today it’s little different money borrowed to finance the campaigns in Iraq, Afghanistan and Syria will be paid by our grandchildren. When I was a student in the 1960s, I was told that the country was still paying for the Crimean War, a war that was fought in the 1850s. War is a fantastically expensive enterprise for which their is little return. 
As a sceptical economist I doubt the value of making huge investments in products that either will never be used or if used destroyed in combat. If I heard the new correctly our government is preparing to invest in a fleet of new fighter planes the F35 at a cost of £100 million a plane. I cannot as an economist see the utility or purpose of investing £10 billion in a product that only has one purpose which is to be destroyed. The cost of the new Trident missile system is estimated at £100 billion or just less than 10% of our annual national income. Why I don’t dispute the value of deterrence in an irrational world I do wonder if it needs to cost so much. Is their an inverse logic that applies to military thinking, which simply stated means the more that is paid for war weapons the more utility and value they possess regardless of their effectiveness? Is price becoming the new deterrent? It is often said of the British military that they want gold plated weapons systems. The British and European government’s spent billions developing a warplane that had such poor flying characteristics that it was nicknamed the ‘flying sow’.
There can only be one somewhat nonsensical conclusion, the government has to invest in a product they never intend to use or hope never to use. The investment in military hardware must be sufficient to deter possible aggressors yet never be such as to bankrupt the country.Perhaps the ideal situation occurred during the Cold War when both the USA and the Soviet Union invested billions in a weapon they never wanted to use, that is the nuclear deterrent. However peace was maintained only at the price of mutually assured destruction (MAD). This however was far from ideal as in the case of the Iraq war warriors, if one group of leaders thought they possessed an advantage over the others, they could be tempted to use their weapons of mass destruction. Perhaps the only solution is for the leaders of the most technologically advanced nation to limit their military superiority over others so no future leaders are tempted to use those weapons in a pre-emotive strike. 

Stupid, Stupid Economics

  

Whenever I open the paper I read yet another article that makes me despair of the competence of our politicians in managing our affairs. The latest example occurred when I read that our Chancellor of the Exchequer was going to fund the increase in spending on the National Health Service (NHS) by ending grants given to student nurses to fund their training and instead make them fund their own training by forcing them to take out loans. It does appear on the surface as a reasonable policy as it means it can transfer the £800 million pounds spent on grants to und extra health service spending. However in both parliament and the media this went unquestioned as all accepted his reasoning. However the logic of his actions was nonsensical as any enquiry would have shown.
First of all that £800 million is not going to be taken from nurses training to fund extra NHS, he is in fact increasing overall spending by a further £800 million. The money that would have gone to fund these grants will now instead be paid to the loans company to enable them to lend the money to student nurses to fund their training. Nurse training takes several years and these nurses will not start paying back these loans until some time in the future. Then when they do start to repay them, repayments will only total a small proportion of the total. Sleight of hand and some imaginative book keeping will make it appear that the Chancellor has kept within his budgetary limits on NHS spending when in fact he has done the reverse. When Disraeli said that there are ‘lies, damned lies and statistics’ he could have been speaking of the practices of contemporary Western governments as when such stupid economic practises are commonplace. 
The British media is fond of reporting on the nonsense spoken by some of the more extreme of the Republican candidates for the American Presidency but in the words of the Bible, they have pointed out the splinter in their neighbour’s eye, while ignoring the beam in their own eye. Just because British politicians speak in an educated voice, one developed in years of tutoring at elite schools and universities, it does not mean that they are not incapable of speaking nonsense equal to that spoken by Donald Trump. Their education is one of manner not intellect.
Just last Sunday I had to travel 20 miles to collect my daughter from a railway station. The train service that should have come to her home station, terminated at this distant station. When I arrived at the station there were hundreds perhaps even a thousand people queuing in the cold night waiting for a replacement bus to take them to their destination. This is no unusual occurrence as every train traveller has similar stories, in Britain we have come to accept that on Sunday’s and public holidays our railways cease to work. In this case it was said to be a signal failure, when in effect it either routine maintenance work or essential upgrading work that had gone wrong. In Britain the convention is never tell the people the truth.
Perhaps this is yet another good example of stupid economics. British railways to the user provide what at its best is an adequate service, which all too often is mediocre or occasionally awful. Yet our elected politicians see the privatised railways as a success story. What they see is increased numbers travelling by rail as demonstrating the successful of privatisation. Failing to see that this is due the flight from the cities caused by high housing costs forcing millions to live distant from their place of work. These millions then have no alternative but to use the train to get to work. No matter how many complaints about the inadequate service, such as thousands being forced to travel at peak times in conditions worse than those in which livestock are transported, all politicians know the railways are a success story. They just know that railways run by private enterprise are superior to those run by the state, now matter how bad the service appears to customers. Politicians see their role as that of the PR division of the railway companies whose role is to deflect complaints about poor service by convincing rail users that they are not receiving a poor but the best possible service. As with so many evangelical salesman they tell people that their patience and will be rewarded with a place in railway heaven. 

Why is Stupid Economics so prevalent
The question must be asked why is stupid economics so widely practised. There are several possible answers. One must be the education that our leaders received, nearly all studied philosophy at an elite university. There they would have been taught that we live in a post modern age and what were assumed to be economic truths, were only the truths of a former age, that of mass production. Truths such as those that said a universal welfare and health system can be provided out of taxation are the ephemera of another age and have no place in today’s society. Post modernism teaches that truth is relative to a particular historical period and the truths of one age have no place in another time. The truth of post modernism is Neo-Liberalism and the associated in the virtue of the free markets. It is said that this is no longer an age of great truths, whereas it is an age that no longer believes in the big or great government. It is the age of the small state, the unregulated market and unrestricted freedom. The Treasury has even rewritten economic theory to reverse one of the truths of the modern age which is that government spending increases the level of economic activity, now it is claimed to do the reverse. Post Modernism teaches that what you believe is true is true, it’s what in former times was called relativism. Therefore stupid economics must prevail there are no economic truths, there are no grounds from which to crisis erupted the practise of stupidity..

There is one other answer that comes from the education our leaders received at their elite universities. Nearly all studied politics of which a part is a study of voting behaviour. This teaches that people respond not to policies but to emotion and feeling. Therefore rational policy making is less important that engaging with people’s feelings and emotions. As they are so distant from the people that they cannot gauge what the people are thinking from the press and other intermediaries. All to often they equate the headlines in the tabloid press with popular feeling. (Such headlines may coincide with popular emotions and feelings but not necessarily so), what they are seeing in these papers are what a number of university educated journalists believe is the popular feeling. They are looking at a mirror which reflects their contempt for the people, a people incapable of thought. Such contempt is a bad foundation of which o make policy.

One other factor is the decline in the great institutions that make up the democratic state. Parliament is seen less as the great assembly in which to make one’s reputation, than as a pathway to a profitable career in consultancy or to a directorship in a newly privatised industries. 
  
What these leaders would never understand that there can be a place for nonsense as opposed to stupidity in economic policy making. The former is a practise which contributes to the well being of the country, while the latter is just stupid as does no one any good. A good example of nonsense economics comes from the Second World War. People were urged to contribute their aluminium pots and pans to the war effort to provide the material for constructing Spitfires. In fact the amounts collected could never have helped build more than one Spitfire. Government economists used this policy as a ploy to convince people that they were contributing to the war effort and helping beat the enemy. It was nothing more than a morale boosting exercise, but it was a very effective one, as it made the householder believe than by sacrificing one pan they were helping to beat Hitler. I fear this good practise of nonsense economics is beyond the wit of our contemporary leaders. They prefer to practise the dumb economics of the herd think. 

Why the wealth of Britain is more apparent than real.

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Mummers of the type the author was familiar with as a child

The Idealised Non Monetary Market Economy

Having lived for almost seventy years I have witnessed a revolutionary change in society. The society I knew as a child, one rooted in a settled rural community has disappeared, to be replaced by the restless Neo-Liberal society of atomised individuals. As a child I attended a Christmas party for the estate children. The party organiser persuaded the older children to take part in a mumming play about St. George. A play in which St. George is slain by the treacherous Moor and then brought miraculously back to life by the doctor. It was a play that had been performed by mummers for hundreds of years in our community. Although were barely understood its mummery we knew it was part of our heritage and such should be cherished. Today that community has been dispersed by the forces of economic change and such a play today would only serve to remind the residents of the quaint rural past. The dairy and the houses of the dairy workers are now bijou residences for those lucky enough to have a well paid job in the new financial sector. Those inhabitants of the old rural communities have been dispersed to the margins of the rural community, living in the private rental housing in nearby towns.

The rural community in which I grew up consisted of a series of interlocking networks of supportive social relationships. When I went to a neighbouring hamlet I went there as the gamekeepers son who was friend of one of the boys living in the hamlet. Also my mother worked on the local farms fruit picking with some of the women of this hamlet. There were many other interactions between this hamlet and the one in which I lived. It gave me a seven year old boy a sense of security, if I got into trouble I could turn for help to one of the adults in this hamlet for help. I unlike the my own children could stray far from home without my parents being dogged by the fear of the stranger. Sociologists term this social capital but all too often they see it as did Pierre Bourdieu, as it being the acquisition of a series of cultural skills and attributes that make for success in society. The example usually given is being born into a middle class family and inheriting from them the cultural set that will make for a success in society. However this ignores the more important facet of social capital which is its contribution to the well being of a community. Those networks that are most supportive are developed by people living in settled communities, its part of the inbuilt sociability of being human. All this essential social capital of supportive networking requires is space and stability, people given time will always make and remake the community. Unfortunately this essential social capital that is the settled community regarded by economists and governments as a hindrance to economic development. They want a rootless labour force that moves from place to place according to the demands of industry. What others saw as misery the British Treasury saw as a success. The visitors to the Olympic games in 2012 in London had the no problem finding accommodation because the private landlords had evicted their former tenants in favour of better paying guests from abroad.
The decline of the non-monetary economy and the consequent destruction of social capital
The wealth of the British nation has increased immeasurably since my childhood. Car ownership was a rarity in my childhood, while today the majority of families own at least one car. In the street in which I live the majority of households own two cars, yet I would argue that my neighbour’s are in some ways much poorer than their predecessors. When I first moved into the street all the houses were owner occupied now whenever a house comes up for a it is likely to be bought by a landlord and the new residents are families on short term tenancies. These new residents are there on insecure short term tenancies and will rob ably be moved on within a year of two. Just as the influx of money destroyed the settled rural community of my childhood, the same is now happening to my street. Neighbour’s such as C… who have lived in this street for fifty years will become an increasing rarity, in future long term residents will be those who have renewed their tenancy agreement for the second year. To paraphrase another writer, the typical British resident will have a smart phone, a car purchased on credit, but live in unsatisfactory accommodation, possibly squalid and over crowded and working in low income insecure employment. This poses the question who lives the better life my father who having just been demobbed from the army in 1945 had a income of £4.50 on which to support his family or today’s worker on the average wage of £120 with the car etc, something my father never had. What I would suggest is that my father, had all the monetary and non monetary advantages,such as security of employment, security of tenure and the knowledge that although his income was small it be sufficient to feed and clothe his family, in other words peace of mind.

To give another example, whenever we moved into a new house, the new neighbour would always call to introduce themselves and offer the new family a cup of tea, some sugar and some basic groceries to tide them over until they could stock up on food. My first pair of slippers came courtesy of a neighbour. He stood me on a piece of cardboard and traced an outline of my foot on to the cardboard which he then cut out. Then he and his wife knitted the uppers which they attached to the sole. While it is possible to over romanticise the poor but compassionate society of the late 1940s and early 1950s, it does demonstrate that there is a wealth that is not quantifiable in cash terms. A wealth that is not exchanged for cash within the market, however as its intangible and impossible to quantify it is undervalued by economists, or more usually ignored. Yet for an economist anything that is valued should be regarded as wealth, good health is valued by all yet impossible to quantify. Economists will try to put a value on it in terms of possible days lost to work through ill health, yet this does not adequately describe the value that people attach to good health. Similarly there is no money value that can be attached to friendship or all that is good in human relationship.

The Contemporary Damaged Society

There is a canary in the mine * which demonstrates the loss of humanity within contemporary society. The canary in the mine is the young people of this society, they being the amongst the most vulnerable, will be the first to show signs of harm. Statistical evidence shows that British school children are amongst the most unhappiest in the developed world. Amongst British children there are also record levels of self harm. There further evidence which is anecdotal but there seems to be record levels of ill health amongst young women that did not seem to be there when I was young. Is this because young women are more vulnerable to stress and the ills of contemporary society? Are there additional insecurities and anxieties that affect young women in particular or is it changes in the environment that causes the harm to women’s bodies? Is it a coincidence that the two of young teenage female stars promoted by Disney, Britney Spears and Miley Cyrus, now they are adult both demonstrate the symptoms one associates with mental ill health? The struggle to reconcile the ideal female role with the reality of the real lived life, the result is unhappiness and ill health. This contrasts Justin Timberlake another former child star who seems to have suffered none of the mental health problems of his female counter parts. I know that young men have a higher suicide rate than men, but is women’s greater ill health because they are better able to handle depression, and that depression is sublimated into physical illness.

The Model for a Better Society

All the glitter and glamour of contemporary is merely the pretty surface that hides a dark interior. There is not just the physical misery of increasing impoverishment of large sections of the population but also the destruction of the non-monetary economy ( social capital) that provides the essentials necessary for a happy life. There is one interesting similarity that illustrates this and that is the prevalence of high levels of family breakdown in both the families of 19th century industrial Britain and today. Contemporary commentators in the 19th century wrote despairingly about the lack of morals amongst the working class, in particular promiscuity. Family groups were constantly breaking up and remaking themselves, either through death or the stress imposed on the family group through living in the inhuman conditions of the 19th century slum. One chilling example was the wife or companion of the ordinary soldier, usually because of the early death of the male partner, these women had to resort to prostitution to survive, taking on a number male partners was necessary to obtain the means for survival. In today’s rootless society there is a similar level of family breakdown, where it is estimated that 1 in 2 marriages will end in divorce.

Politicians and economists are obsessed with growth in the physical or monetary economy, failing to note the need for similar growth in the non monetary social economy. Whenever people are unrooted and forced to move to a new area. They immediately try to recreate the community that they have lost. Neighbours become friends and new social networks develop that provide the supportive framework necessary for individuals to thrive. In a street such as the one in which I live, increasingly the houses are purchased by landlords. The increases the material wealth of the city as the money the tenants pay for their accommodation far exceeds that paid by an owner occupier for their mortgage. In consequence the value of the houses go up in the area, the city appears to be much wealthier, as its capital stock has increased greatly in value. However the social capital is much diminished. Older people develop feelings of insecurity as they know less and less about their neighbours. The threat to the street is that it becomes a street of strangers, as the new tenants will be moving on within a year when their tenancy runs out and for such people it is a waste of their social capital to make friends. All those essential but intangible services that are provided by a stable settled community disappear. In such a society such as Britain or a society of strangers, the fear of crime far exceeds that of fear in crime in societies that experience high level crime societies. In society where you don’t know your neighbour fear of the unknown soon becomes fear of the criminal.

The solution to this problem is create a society of neighbours in place of that of strangers. The means are quite simple give the new private rental tenants security of tenure, legislate to make long term tenure the rule. Today any landlord can give their tenants two months notice to leave, and its very unusual for any tenant to remain in a property for more than 12 months. If they had security of tenure they would make friends of the neighbours and the support networks so common in the past would develop again in these urban communities. What economists and politicians never understand is that there is a wealth valued by people that living in settled communities, which is plays a key part in maximising human welfare.

The ignorance of this necessary and essential wealth is demonstrated time and time again by our political leaders. Whenever the major employer collapses in an area, such as is currently happening in the steel town of Redcar. The government sends in employment agencies for whom one of the priorities is to find work for the unemployed in another more prosperous area. Our government does not understand and therefore fails to value the social capital inherent in a stable community. Instead it sees the community as a drag on industrial mobility, that stops people leaving the area for work elsewhere. Unlike the government the residents of Redcar and other towns of the industrial holocaust recognise the value of the social capital inherent in their community.