Tag Archives: Winston Churchill

Heaven save us from ‘Great Men’*

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Heaven spare us from great men*, should be amended to include the much greater category of those who think they are great. Perhaps the greatest curse of the present age is the numerous would be great men who wish to remake the world according to their own thinking. Government now in the U.K. is one of disruption, as each new minister tries to make his mark by changing or reversing the policies of his predecessors. In the U.K. at least never has the country been so ill served by the activities of the disruptive and damaging individuals.

History at my primary school was the history of great men. I remember lessons on Alexander the Great and King Alfred (the Great).We would sit quietly at our school desks listening in awe to stories about their achievements broadcast by the school radio. Not until I was much older did I realise that there was a dark side to these men. Alexander the Great destroyed great civilisations, the destruction of the Persian capital Persepolis was one of his crimes. The destruction of this great city by fire was nothing other than an act of senseless vandalism. At the time of its destruction Persia had already been defeated and its destruction was no other than an act of revenge which served no purpose. When conquering the Persian Empire, his army had came across a Greek town whose forebears had fought with the Persians on the side of the Persians a 100 years earlier. He decreed that descendants of traitors should be destroyed. All within the town boundaries were slaughtered.

However Alexander was not only a destroyer, he introduced Greek learning and culture to the wider world. In Alexandria the city he built in Egypt, housed the greatest library in the ancient world. Alexander was a educated man, his tutor Aristotle was the leading philosopher of his age. Unfortunately today’s great men while sharing Alexander’s taste for destruction, lack his talent for creation. They either seem to lack education or despise the education they received. What these men have is a shared barbarism. Whatever they claim they have a distaste for learning. They may enjoy the opera but they don’t see the need for the culture of the arts to be shared with the lower orders of society. Arts education has been removed from state schools, as all they want from state schools is a simple functional education that will make the masses fit for the workplace. Not for these men will the legacy of a man such as Carnegie who endowed society with theatres and libraries. If these contemporary great men are educated they deem this as something that should not be shared with the undeserving majority.

Great men such as Alexander can only succeed through the ruin of their rivals. Alexander probably conspired in the murder of his father other enemies through warfare. In an authoritarian political system the destruction of your rivals is necessary for success and the only means of remaining in power. Paranoia is the common personality trait of the authoritarian leader. One king of the classical age so feared assassination that his bed was on a pillar that could only be accessed by a drawbridge, one which he could pull up at night to deny access to any would be assassins.

Winner takes and keeps all is not appropriate in a democracy. Politician have opponents who should be respected. Success should only be achieved by playing politics according to the rules of the game. If a politician’s opponents are described as enemies, this is not the action of a democratic politician. The essence of democracy is a plurality of political viewpoints and power bases. Rival power groups and politicians compete for power in the legitimate manner. Being prepared to lose and accept the rule of your rivals is one of the essentials of a democratic system. Unfortunately contemporary great men don’t operate according to the rules of the political game. They set out to destroy their rivals and their power bases. Such men intend to retain power by creating a one party state, and they manipulate the political system to achieve that end. Other politicians and their political parties can be tolerated only as long as there is no possibility of them attaining power. The toleration of other political parties is merely the democratic patina, which gives legitimacy to the political system.

What is common to all the contemporary great men is that their greatness is self chosen. All are desk bound warriors, who unlike the great men of the past they have never hazarded their lives in defence of their country. One great man to whom these great men in Britain pay homage is Winston Churchill. Winston Churchill took part in the last cavalry charge made by the British army at the Battle of Omdurman in 1898. He unlike them was willing to risk his life in service of his country. Does there awareness of their lack a heroic hinterland drive them to claim a greatness they little deserve?

There is one long forgotten study which suggested that successful businessman were the victims of inattentive parents. Their parents had paid little attention to them when they were small. Consequently these children adopted a variety of attention seeking behaviours to attract the attention of their parents. This behaviour continued into adulthood, over achievement being a means of attracting the attention of a now non existent parent. They needed recognition and by making a large fortune they now received it. Does not each of our current great men also crave this attention and adulation? Are all our current great men also victims of neglectful or inattentive parents?

There is one characteristic of these great men that makes them a threat to democracy. They crave adulation, they want others to recognise their greatness. One characteristic of democracy is that all are subject to the rough and tumble of the democratic process, even the greatest of politicians is subject to ridicule. This is something our contemporary great men cannot stand. What pains them is that there fellow men cannot respect them for their greatness. They can only achieve the respect they demand and crave, through silencing those who show disrespect. This can only be achieved through negating those very democratic institutions which to them there enemies exploit to unfairly mock them. All these contemporary great men are anti democratic as they wish to silence the voice of dissent and mockery, whether it be in parliament or the media.

Our democratic systems of government lack the one element that enabled the Athenian democracy to survive catastrophic defeat, and a disastrous plague, a means of neutering the ambition of these great men. In Athens whenever a great man of overweening ambition threatened the democratic system, the demos (people) could respond by voting into exile these dangerous men. Anglo-Saxon democracies lack this protective mechanism, we instead have little means of protection from their damaging behaviours. Perhaps just as the Anglo-Saxon societies led the Western world into liberal democracy, now they might be the leaders in adopting the new authoritarianism.

*I cannot remember the source of this quotation

*l appear to have excluded great women from my essay. I am aware that great women such as Catherine the Great of Russia have exercised supreme power. What I am writing about is a personality trait that is overwhelming male. A destructive ambition for greatness that destroys all around it.

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Fools Gold or the Economic Follies of Phillip Hammond and like minded Conservative Politicians.

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Our current Chancellor is nicknamed spreadsheet Phil, a name intended to reflect his prowess in managing the country’s finances. His proud claim was to have achieved what most Chancellors had failed to achieve, that is a balancing of the books. He announced that the government daily revenues exceeded its spending. To use economic jargonese current revenue exceeded spending, that is tax revenues exceeded spending on hospitals etc. This was for him a cause for celebration and he was feted in the financial columns in the print media. However much like iron pyrites* all that blisters is not gold.

Chancellors of a Conservative mind have always sought to achieve the holy grail of sound money. A non existent myth much like that of the holy grail. As students we were given the example of Winston Churchill who as Chancellor who returned the pound sterling to the gold standard in 1925. He choose a rate that valued the pound at $4.84, its pre war value. He said that he wanted to look the dollar in the eye. A political move as the ravages of the First World War had diminished the relative value of the U.K. economy and its currency and had confirmed the USA as the world’s leading economy. Consequently the dollar was now the world’s strongest currency. Churchill wanted to put the pound on a par with the dollar. It was economic folly, as the expensive pound priced U.K. exports out of foreign markets. In consequence the U.K. had a trade deficit, which could only be kept within reasonable bounds by depressing the level of income activity. This cut the level of overall demand in the economy and so reduced the import bill. Much of the misery experienced by the people of the 1920s was a consequence of this policy.

Phillip Hammond just as did his predecessor, does not understand that a weak or unsound economy makes any sound money policy fallacious. Simply because such a weak economy is likely to experience sudden and unexpected downturns, which in the eyes of the financial community can render the sound pound and chancellors reputation unsound over night.

Our current Chancellor has continued with the austerity policies of his predecessor and has fulfilled his predecessors aim of ensuing that government revenues exceed its spending. What they both want is the respect of the financial community. If the financial community believe that the government is pursuing a policy of sound money, they both believe many benefits accrue. One is that this community will allow them to borrow at low rates of interest. However this is of little practical benefit when the government chooses not to invest. Currently investment in infra structure projects is the same as in Greece one of the most impoverished of all EU member states.

However the plaudits of the financial community soon become worthless in a financial crisis, as then that community is forced to confront stark economic realities, that they would prefer to ignore. At present the current benign economic climate allows the financial community to overlook the very obvious weakness in the economy. When forced to confront them they will turn on the government. Greece provides the obvious example of what happens in these circumstances.

Phillip Hammond is astute enough to realise that the U.K. is subject to regular periodic economic crisis.* When that occurs he might need to find the funds to tide the U.K. economy over that crisis. He believes that if he builds up a war chest of money by continually spending less than he receives, that money can be used to avert any run in the pound as occurred on Black Wednesday. What the Chancellor fails to understand is that this cash reserve will rapidly diminish in value as the pound falls in value during a crisis so in consequence making that reserve of cash too small to be of any real value. One of the characters says in a Stendhal novel, that what takes ten years to build can be destroyed in ten minutes of warfare. The same applies to Chancellor reputations. In any major financial crisis the government and the Chancellor rapidly lose all credibility, so all the years spent creating a reputation for soundness are rendered meaningless.

What should be the aim of any Chancellor is a sound economy not a sound money policy. While there are many fundamental weaknesses in the U.K., two stand out. The first is the persistent trade deficits. At 6% of GDP it is the highest of any developed country. This debt is financed in part from money invested in the U.K. by foreigners. As a country we are paying Germany, the USA and our many other creditors by recycling the money that there nationals invest in this country. A situation that cannot continue indefinitely. One day the financial community will decide that the emperor has no clothes.

Secondly as a nation the U.K. borrows short and lends long. The U.K. is one of the world’s leading financial centres and as a consequence many foreign nationals invest there savings in London. These moneys are usually invested in accounts with a short term notice of withdrawal and pay a relatively modest interest rate. British banks to finance these accounts lend long for which they receive a relatively high rate of interest. This arrangement works fine when the investors have confidence in the country concerned. In the event of a crisis these investors want their money back. If the amount invested is relatively small compared to the size of the country’s wealth (GDP), that country will have no problem in averting a temporary ‘country run’. When those sums are relatively large when compared to a nations GDP as in the case of the U.K., the county’s reserves of foreign currency will be too small to avert a ‘country run’. As Black Wednesday demonstrated when the country was bankrupted in one afternoon due to the activities of foreign currency speculators. Unfortunately spreadsheet Phil appears to be ignorant of this fact.

Britain’s chancellors should have been working to remedy all the flaws the financial crisis of 1992 and 2008/9 revealed. Instead there has been a papering over the cracks, with the so called sound money policy. This is not a folly practiced not by just Conservative Chancellors of the Exchequer. When Gordon Brown was Chancellor in a Labour government he also pursued a sound money policy, instead of implementing the necessary structural reforms necessary for strengthening a weak economy. Although the crisis of 2008/9 was a financial one caused by the foolish speculative activity of financial speculators, the fact that he and none of his successors failed to make any attempt to create a sound economy, meant that the economy has failed to make the expected recovery from the last crisis. The majority of the population have experienced either falling, stable or small increases in income since 2009, a mark of a failing economy.

It is a perverse rule of thumb that when the financial columnists particularly of the right wing media laud a Chancellor for the soundness of his economic policy making, usually that Chancellor is making a hash of things.

* Iron pyrites or fools gold were the staple of many stories in the cowboy magazines of the 1950s.

* He is aware that just such a crisis might occur when the negative consequences of Brexit become obvious to all.

Is there a possibility that events such a Black Wednesday will occur more frequently in the future?

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The short answer to my question is yes. There will always be that occasion when that combination of human folly and arrogance will lead to a repetition to the economic disasters of the past. As an economist I can reconcile myself with the knowledge that such crisis are but a once or twice life in a time occurrence. Unfortunately I believe that I will be unlucky enough to experience a third life time economic crisis, but one of such damaging dimensions that it has the potential to make the crisis of 1992 and 2008 seem relatively insignificant.

Recently I read an article in ‘The London Review of Books’ which expressed an opinion which I share and that is, that for the first time in recent history we have a group of leading politicians who want to do ill to a substantial number of their fellow citizens. These politicians are the ultras of the Conservative party. It is not just the turning back of the clock to disadvantage those groups that have profited from modernity, but desire to impoverish large numbers of their fellow citizens. Now some of them are beginning to openly admit that leaving the EU will not deliver any of the benefits they claimed in the referendum campaign. In fact they recognise that there will be a significant loss of national income as a result of Brexit.

There are those who believe that the economic downturn consequent on ending our free trade deal with the EU, will lead to a modest reduction in living standards.  They believe that the stoicism of the British will enable them to weather this temporary storm. Britons endured worse during the Blitz and so they believe they will the people demonstrate a similar stoicism in seeing out this downturn. Just as in 1940 they will see this deprivation as a price worth paying  to be free of this new tyrannical continental behemoth that is the European Union. They seem to want to replay the 1940s, but with a contemporary twist.

However what they do not seem to realise is that the various predictions of a 3% or 8% in future income growth are the cautious predictions made by economic statisticians. The  economy is not some mechanical creation such as a car that can be tinkered with to produce a slightly more modest performance, it’s a dynamic social organisation that is capable of volatile, unexpected and sudden changes in direction. An economic slowdown is quite capable of turning into something much worse.

The British economy as with many others includes within it many economic fault lines that if triggered would wreak tremendous damage to the economy. What these foolish politicians have forgotten is “Black Wednesday’ in 1992, a day in which speculators effectively bankrupted the country.  All the weakness in the economy that existed then, still remain today. One such is the massive private sector indebtedness, which includes that of the banks. Britain is one of the world’s bankers and as such it holds a large proportion of the world’s cash reserves. The banks assets are moving towards a position whereby they total nine times the county’s GDP, that is about £18 trillion. Just as in 1992 the British banks are borrowing short and lending long. In plain English customers deposit money on short term notice, money that they can withdraw on demand or with a few days notice. Banks lend this money long term, it is invested in property or some other asset, which either cannot be quickly changed back into cash if needed or if cashed in it will return a value much less than that for which it was purchased. British banks have reserves that they can use to fund cash withdrawals in normal circumstances, so this is never usually a problem. However it becomes a problem when the abnormal happens and investors lose faith in the banks and want their money back. The abnormal occurred in 1992 and 2008. On the first occasion the central Bank was almost bankrupted and in the second if was the entire banking system that suffered the same experience. Nobody that is not a fool or an arrogant politician with little understanding of economics would do anything to provoke a recurrence of these past crisis.

One of the triggers of a depression is falling business confidence, once that is lost the economy is in the doldrums. The maladroit government negotiations with Europe over Brexit is leading to a loss of business confidence, as businessmen are increasing uncertain of what the future holds for them.  Whenever politicians are informed on problems tor business that are developing because of Brexit, they are either ignored or dismissed. Such behaviour is further draining confidence out of the economy. In such febrile circumstances a run on the pound could easily be triggered. One such trigger point occur at the port of Dover. The government has made no preparations for the reintroduction of customs barriers at Dover, yet free trade with Europe will end in the near future forcing the government to reintroduce customs barriers. New staff are not being recruited and it no preparations have been made to introduce new  IT systems to processing the import and export trade tariffs, such checks are unnecessary while Britain remains in the single market. It seems to assume that they can introduce a seamless system of tariff collection, when they or nobody else in the world knows what such a system will look like or even if such a system is possible. After March 2019, when Britain leaves the EU and chaos prevails at Dover and other ports, it will be a demonstration of government incompetence. When the government is demonstrating such a degree of incompetence investors could take fright and take their money out of British banks. Our banks are quite incapable of funding such a large and sustained flight from sterling and the UK would have to turn to the IMF for help. The resultant crash would turn the British economy into an economic basket case resembling that which is contemporary Greece.

However there are a minority of Tory Ultras who would welcome such a collapse. The consequence shortfall in government finances would mean that many of the institutions of modernity, such as the welfare state and the NHS could cease to exist through lack of funding. They like the medieval doctors who let blood to purge the body of noxious vapours, believe that an economic crash which destroyed the welfare state would lead to a similar purging of the British character.  Such a purging would be the purging of the welfare dependency virus, no longer would the British people be able to look to the same for welfare or health care. This purging of the British character would lead to a rejuvenation of the British, they would become like their independent 18th and 19th century forebears who created the largest empire the world has seen. Some ultras are even speaking of the Empire 2.0.

However they show little awareness of history, the Greek political parties that dominated the Greek political scene prior to the crash of 2008 that is New Democracy and Pasok have disappeared from the political scene, as the people blamed them for the decimation of their incomes and economy. Although these Tory ultras are careful to remain in the background pulling the strings to ensure that the government commits to their desired hard Brexit, they would not be unable to avoid ‘ownership’ of the post Brexit economic crisis. They were members of the party of government that caused the economic crash and in any election many would be voted out by an angry electorate.

Greek tragedy provides a metaphor which can demonstrate the reality of the crisis facing Britain. In Greek tragedy the God’s raise the hero up, only to later destroy him. It is as if the God’s of the economy have raised the Brexiteers and Conservative Party Ultras to power only to destroy them. The Gods seem to have chosen the least capable and those least fitted for the role to lead the Brexit negotiation, knowing that their incompetence will be the cause of their downfall. It is tempting to refer to Winston Churchill wartime speeches in this context, because they see themselves in the Churchillian role of standing up to the continental tyrant. He said the Nazi’s would reap what they had sown, the same applies to the Brexiteers who will reap the consequences on what they have sown. Not the whirlwind of mass destruction but the whirlwind of economic destruction. Quite possibly the Conservative party, as with the conservative Greek New Democracy party will disappear from history.

Any prediction made by an economist is never more than a probability or a possibility. When the Bank of England predicted economic meltdown if Brexit occurred, it was widely assumed that they had made a terrible mistake, when this never happened. However this scenario was avoided through the prompt action of the governor of the Bank of England, who fearing a downturn in the economy, pumped billions of pounds of extra money into the economy to prevent that downturn happening. Similarly it is possible that the realists in the Conservative party regain control and instead of going for a decisive break from the EU with all it’s damaging consequences, they will negotiate a ‘soft Brexit’ which will minimise the damage to the British economy which will result from leaving the EU.

What skills does a good economist need?

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Humility and the willingness to change their minds

Winston Churchill when speaking of Maynard Keynes (the greatest British economist of the 20th century) said that when four economists are gathered together you will get five opinions and two of them will be from Keynes. What this  illustrates is that what the good economist recognises is that economics is dogged by uncertainty. The economy and its host society is so complex that any unexpected change can result in the policy measures undertaken producing contrary results. When Nigel Lawson in his budgets in the 1980s cut taxes he overstimulated a rapidly growing economy. All that extra money from the tax cuts had no outlet except in for investment in the property market, causing a housing boom that ended in a crash in 1990.  Policy recommendations should be made in the spirit of cautious optimism. With the recognition that policies might need to be changed if circumstances change, as there is no certainty in the practice of economics.

When Mrs Thatcher said, ‘that the lady is not for turning’, she made a terrible mistake. Her policy  of using high interest rates to squeeze inflation out of the economy through depressing demand had the unfortunate consequence of driving the exchange rate. This high exchange rate made large sections of British manufacturing industry uncompetitive. The consequence of this was that British manufacturing industry lost 20% of its capacity, which had the long term consequence of Britain developing the largest trade deficit in the developed world. A problem that still persists today.

A capacity for scepticism

There is no ‘economic cure all’ that can solve all problems, although many economists and politicians foolishly believe that there is such a policy. The latest ‘economic cure all’ is Neo-Liberal economics. In the 1970s the post war economic settlement seemed to be falling apart. In 1976 inflation hit the unheard of high of 27% in Britain. A group of economists the Chicago School claimed to have the answer, they diagnosed the problem as being one of excessive government borrowing to finance its spending programmes. This borrowing increased  demand to a level beyond that which the economy could meet and as supply could not be increased prices rose, as consumers entered into bidding war to get these relatively scarce goods and the consequence was rising inflation. This problem was made worse they said by all the restrictions on the market which prevented industry responding to change by increasing supply to meet increased demand. These restrictions were such as the managed exchange rates, trade unions, employment protection laws and health and safety legislation. If government spending was cut and the restrictions to the market were removed, inflation would fall and the economy would grow ending what was a period of ‘stagflation’. What these economists ignored was the massive increase for the world’s oil etc caused by the American participation in the Vietnam war. There was such a massive expenditure of material in this war that it seriously distorted the world economy.  More bombs were dropped in this short war than during the whole of World War II. When Nixon negotiated an end to the Vietnam War that decision did more than any economic policy measure  to end the malfunctioning of the world economy.

Whether its called the monetarist or the Neo-Liberal economic school of economics, it has failed.There have been three world wide recessions since 1990 each one worse than the previous one. Growth remains minimal, the growth in incomes has stalled yet economists (the majority in the universities and those employed by government and international institutions) and politicians refuse to change their policies. They have invested too much prestige in the Neo-Liberal revolution to abandon it now. A little scepticism about the policies of the present would not come amiss. There are plenty of alternative policies that can be used, it’s only stubbornness and ignorance which prevents them being used.

When politicians and economists state ‘that things have changed’ and that we are in a new economic paradigm, it a sign things are  going badly. It’s a weak defence offered for a policy that is failing and for which no better defence can be thought of. It is the wisdom of parrots as politicians repeat this mantra endlessly without understanding that these phrases are completely meaningless.

A good economist will be well versed in literature, in fact English literature should be an essential part of the course of study undertaken by a trainee economist.

Economics has the potential to be the dullest of subjects. I remember that in the second year of my university course all the second year students had to attend a series of lectures given by one of the world’s greatest monetary economists. They were so boring that students did all kinds of things to distract them from the tedium of the lecture. One particular incident sticks in my mind and that was when a group of bored students launched a giant paper plane from the balcony which soared over the lecture hall.

Literature should be an essential part of the course, because a great novel can better than anything else explain the impact of economic and social change on a people. One of my favourite novels is “The White Guard” by Mikhail Bulgakov. This novel details the impact on one Ukrainian family of the Russian civil war. The play on which the novel was based was Stalin’s favourite play, even although he was on the opposite side of the conflict. The reading of such novels will hopefully lead to the development of some sensitivity towards the human condition in the trainee economist  and hopefully led them when qualified and employed by government to hesitate before recommending policies that cause unnecessary economic and social hardship. One cannot impose a test on economists for the possession of those essential qualities that go to make a wel rounded human being, but hopefully immersion in a course of literature will be a good substitute.

Milton Friedman the Chicago economist provides an example of the extreme insensitivity of which economists are capable. General Pinochet launched a coup to overthrow the socialist government of President Allende. The aftermath of the coup involved the torture and killing of many of those people opposed to the coup. Milton Friedman lauded the actions of Pinochet as necessary for the greater good of society, as the imprisonment and killing of these socialists made possible the introduction to Chile of the free market economy. Only a person of extreme insensitivty would applaud the killing of people as the best means to achieve some ultimate end. I tend to agree with Ivan who at the end of the novel “The Brothers Karamazov” asks God why does he permit the death of a child. (when being shipped of the Labour camps of Siberia he witnesses the pain and a suffering of a woman holding her dead baby). Any economist should ask does my policy proposal cause unnecessary suffering and is there a better alternative that will minimise human suffering. Killing may be necessary in fighting a war but never in imposing economic change on a society.

It may also hopefully prevent economics students suffering from too many dull and boring lectures, as the lecturer will have a better grasp of the English language and human nature than would otherwise be the case.

A good economist will be schooled in philosophy

Any economist must recognise that any policy proposal will be flawed or wrong in some measure. J.S.Mill in the 19th century stated that there could be no science of the humanities because human society was so complex. There were so many possible causes of a particular social or economic event and so many possible unintended effects of a policy measure that the one essential requirement of a science could not be fulfilled and it was impossible to have a science it which it was impossible to demonstrate cause and effect. Mills’ words seem to have been forgotten in the twenty-first century. It is believed that computers that can overcome this problem, as they can make calculations involving thousands if not millions of variables. However what politicians and economists at the world’s Treasuries fail to recognise is that the output of the computer findings are only valid if the calculations on which the predictions are based are valid. What politicians fail to recognise and economist ignore, is that the model of the economy used in the computer does not work, there is something missing. Treasury economists have to insert an ‘x’ factor into the calculations,  a reality factor to enable the computer to deliver a realistic prediction. This x factor is little more than an informed guess. This is why the Treasury computer can only make a correct prediction about economic growth after the event when the necessary corrections can be made to the computer model.

Any student of philosophy learns the limits of human knowledge in the first year of their course. It was a shock to this particular student that philosophy provided few of the answers to the questions that he wanted answering. One such question is what is good, Plato tried to answer this question in this question in his book ‘The Republic’ written in 380 BC and it is a question which philosophers ever since have struggled to answer. Now analytic philosophers tend to think it is an unanswerable question and not one contemporary philosophers should waste time on answering. Instead the quests of past philosophers to understand the nature of the good are to be seen to provide a good schooling in the techniques of philosophy but little else.  Students such as myself had instead to look to theology to provide some answers. The point that I am trying to make is that philosophers understand the frailty of human nature and its limitations. A true philosopher can only laugh at the claims of Neo-Liberal economists who claim to understand the workings of the economy, as the evidence from philosophy demonstrates the continued failure of man to have a complete and full knowledge of  human nature let alone human society. The problem with so many economists today is that although they have studied PPE, they compartmentalise the philosophy they learn and think that its findings do not apply to economics.

Diogenes Laertes in his history of the philosophers recalls how visitors to Democritus frequently  found him laughing in his garden. A thing he frequently did when considering the follies of mankind. If the effects of the wrong economic policies were not so disastrous, I would join Democritus in his laughter.

A good economist is aware of the past and does not think today’s events are unique and without parallel in the past and is prepared to recognise the similarities between today’s events and those of the past.

One extreme example springs to mind, both the governments of the Roman Empire and contemporary Britain regard the provision of cheap food for the people as a priority. Rome was able to supply cheap bread to its people through conquering the countries that were the bread baskets of the Mediterranean and then by  supplying low cost labour for the farms in the form of slaves. Contemporary Britain by contrast encourages the production of cheap food through the provision of subsidies to farmers, one estimate is that now 50% of farmers incomes now comes from EU subsidies. Most of this money goes to towards subsidising what is termed industrial farming, which produces large quantities of food at low cost, but in an environmentally damaging manner. Unfortunately there is evidence that British food suppliers are adopting some of the practices of the Romans. Some of migrant workers on Uk farms  adopted in work in slave like conditions.

What the government could learn from Rome is that using low cost labour methods of production discourages investment and innovation in industry. If there are endless supplies of cheap labour employers see no compellilng reason to invest in expensive machinery, if there are endless supplies of cheap labour. Studies of slave labour have demonstrated how slave labour acted as a deterrent to industrial innovation. A government and business class that believes the only solution to problems in the economy is to make labour as cheap as possible have a lot to learn from the slave economies of the past.

While the one lessons that can be learnt from Rome’s history are negative, much that is positive can be learnt from the actions of the government in the 1930s. This government tried to stimulate an economic recovery after the devastating crash that was the Great Depression. The government then recognised the importance of getting new investment into manufacturing industry so as to kickstart a recovery. Recognising that the banks were unwilling to do this, it set up an industrial investment bank which would lend money to manufacturing industry. Today one of the issues that is delaying the recovery is the comparative lack of investment in industry and manufacturing industry in particular. A recent study showed that only 15% of bank loans went to investment in industry most when into speculative trading in property etc.  There is nothing to be lost and much to be gained by setting up a new industrial investment bank and it could be financed through a levy on commercial banks, as happened in the 1930s.

This list of criteria for judging what is a good economist is not intended to be exhaustive but suggestive.

Can a sense of collective depression account for the decline of Britain and the West

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Image taken from socialworktutor.com

Periodically I suffer from depression and with depression comes a self loathing. The depressed individual sees themselves only in terms of their failings, it is a worse picture scenario. When going through a bad patch I would compare myself unfavourably with others, in my mind I over exaggerated their strengths and virtues and under estimated my own. Something similar has happened to Western democracies, they seem to be under going a collective depression. This collective lack of self confidence negatively impinges on our choice of leaders. We just them by their failings not their strengths, we have lost the ability to pick leaders on the basis of their strengths.

Womanising politicians such as John Kennedy, Franklin Roosevelt, Lloyd George would have never made it near the top in our contemporary world. A rival would have revealed their many liaisons to the press so as to destroy their career. Yet these three men were visionaries who could envisage a better world and could motivate others to share their visions. David Lloyd George had a vision of a society in which the ills of the industrial revolution were ameliorated through the provision of unemployment benefit. Franklin Roosevelt bought into effect the New Deal which ended the mass unemployment and poverty of the Great Depression. John F. Kennedy initiated the Great Society and under the aegis of this umbrella term many reforms such as Medicare where introduced to improve the lot of the less well off in American society and he started the process that ended worst forms of racial discrimination in the USA. Black Americans now had the protection of the law and killing of ‘uppity Negroes’ had became a crime. This is not to deny that politicians with exemplary family lives don’t make great leaders, but as leaders are chosen on the basis of whether or not they behave well towards family, excludes the great leaders who have had a less than moral personal life.

Britain in particular cannot conceive of leaders except in terms of their vices or relative lack of vices. Not being a self confident society, it like the depressive only sees the world around them in the worst possible terms. Great ideas and the associated visionary politics have disappeared from British society. Now great ideas are seen to be a propaganda cover for a particular interest. Words are bandied about by politicians but those words have no real meaning. Rather than explain a policy vision a politician’s speeches contain a number of key phrases designed to evoke the right feeling and response from voters. In the words of a former Prime Minister, that ‘vision thing’ is lacking from politics. Our depressive society cannot believe that there can be any great ideas or leaders.

There is one example that I can call to mind, which illustrates perfectly the current low level of personality based politics. During a wartime debate in Parliament Winston Churchill was accused by an opposition MP Bessie Braddock of being drunk. He replied that ‘I may be drunk now, but I shall be sober in the morning, you are ugly now and shall still be ugly in the morning’. The sexist language is no longer acceptable but the important fact is many people in Westminster and the press where aware that he had a serious drink habit, yet it was considered of no significance. What mattered were the outstanding qualities he embodied as national leader. Churchill was also subject to intense periods of depression, periods he referred to as the black dog’. Today a rival would have leaked stories to the press about his drinking and depression ensuring that he would never get anywhere near the leadership of the country.

A more current example illustrates how a political career can be destroyed through gossip. Charles Kennedy as leader of the Liberal Democrats took the party from being an insignificant fringe party to the centre of British politics. He increased the number of the parties MPs from less than twenty to over sixty. Unfortunately he as with Winston Churchill had a serious drink problem. A problem which destroyed his career in these timid times. His rivals leaked stories about his drink related problems and he was forced to resign the leadership. After rejecting the next leader for being old, they selected a leader fit for the times. He was a very presentable young man who was a devoted father and good husband. This leader displayed such a lack of political acumen that he led the party to disaster at the polls. Now the total number of Liberal MPs could be comfortably be seated in a small family car. The party rivals by focusing on Charles Kennedy’s weakness, were able to obscure the fact that he was an inspiring and effective leader, who in spite of his drinking towered above his rivals. Charles Kennedy’s rivals were able to leak stories about his drinking problems to a press that saw an MPs vices as the story, not his politics. It is true as had been said that the British press rarely ventures out of the gutter in which it habitually wallows. Only a society with no confidence in itself would think that politicians foibles rather than policies are the main story.

There is an interesting historical comparison. In the dog days of Athenian democracy, when it was in decline, politicians stopped attacking each other’s policies and instead attacked their rivals by claiming their bad behaviour in their personal life made them unfit for high office. These politicians planted informers within the entourage of their political rivals. These informers would report salacious stories about these men to their employers. Political careers were destroyed on the basis of what can only be called malicious gossip. A situation not unlike today’s Britain were the informers are political rivals in the same party ever eager to leak damaging stories to the press. These stories are then published in the news media and a run of bad stories can ruin a politicians career. Today’s politicians have delegated the role of destroying political rivals through the publishing of malicious stories to the press. It is the press not politicians than determine the success or otherwise of a politicians career. These stories can be quite trivial in nature but the cumulative effect is the destruction of a career. One such example this trivia is the leaking to press of stories that a particular senior politician had a quick temper and threw staplers at his staff. A story that was totally irrelevant to his leadership capabilities. Unfortunately in today’s Britain politicians prefer to destroy their rivals anonymously through the leaking of malicious stories than through open debate.

Suggesting British society is going through a period of collective depression is unusual, but I can think of no other equally valid metaphor that can be used to describe Britain today. Only a society in this strange mood which can see nothing good in their politicians, a country in which the least bad are chosen as our leaders. One characteristic of all our leading politicians is their emphasis on their normality. They never aspire to greatness, oratory has vanished from our politics speeches put the emphasis on their ordinariness they always agree with the generally accepted opinions. The leader of the opposition party is subject to vilification for not going along with the majority view in parliament. When one reads about the actions of the members of his parliamentary party one gets the impression that there is a desire to abandon these challenging policies and retreat the safety of the parliamentary consensus. These MPs have been baying for military intervention in Syria in unison with the members of the governing party, they are afraid of seeming to be different. This fearfulness and the seeking of a security blanket is also typical of depression. The depressed individual seeks to hide from the world, normal social intercourse becomes difficult. There is also a desire for the peace of anonymity, a desire not to stand out. All characteristics of the current political classes.

All to often commentators speak of the loss of hope among the young, as they face a world which is increasing hostile to their aspirations. Yet this loss of hope is common to all levels of society, but particularly among the political classes. They also lack in the future, they lack the confidence to introduce for example radical policies on climate change. A selection of policy proposals from the last election demonstrate this timidity, rather than offering private rental tenants security of tenure, they were to be given the right to ask for it from their landlord after a certain period of time. Rather than ban zero hour contracts the employer would be given the right after twelve weeks to ask to be given permanent contract. Taking the last one it is obvious that employers would dismiss staff after eleven weeks to avoid having to offer that a permanent position in the workforce. Probably the same employer would after having given an enforced break to their employees, would rehire them on a new eleven week contract. A good example of promising to alleviate a major social ill, while in fact doing nothing to change the situation. What could be a better example of the mood of hopelessness that infects the mood of politicians.

Often it is the young who are cited as having no hope, which may be true but its more true of our political classes. They as with the depressed individual have lost hope and believe it hopelessly misguided to think they can do anything to improve the situation. They as with the depressive see themselves as helpless pawns who are the playthings of greater forces, such leaders lack the self belief to implement changes necessary to arrest the slow decline of this country economy a decline that will see the living standards of the majority fall towards those prevalent in the less developed economies. Already this country’s fall from major power status is obvious, as it can only provide six ageing fighter bombers for the campaign against Isis.

Why there will never be another British Winston Churchill, the theory of political dwarfism

Economics, Philosophy, Politics, society, , , , , , , , , , , , , ,

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Political dwarfism explained

Politics in the UK is dominated by a set of mediocrities, not that this is new, if you read history there is frequently despair about the quality of political leadership. What is not new is the depths to which our current leadership has plunged. They seem to be indifferent to the problems besetting UK society, seeing it as not their concern. At the risk of using an over employed metaphor, they are the band playing on the deck of the Titanic, although unlike that band they are oblivious to the dangers that surround them.

There is one startling example that demonstrates this indifference. In London a housing estate has been taken over by an American property company; that will make the current tenants homeless through the simple expedient of tripling the rents on existing properties to bring them in line with current market rates. Fortunately the tenants have secured a stay on the rent rises which will enable them to stay in their homes over Christmas. Originally the estate was established to provide housing for people on low incomes, a good intent that matters little in a residential property market driven by speculative greed. Despite the publicity given to the plight of these people in the media, the political classes as a whole have remained indifferent to their plight. Even the Mayor of London a man ever eager to court publicity has remained aloof from the tenants campaign. The only public figure to have sided with the tenants is a comedian, Russell Brand. A man demonstrated the commitment that should be expected from the politicians. Instead they are all to keen to demonstrate their helplessness in the face of ‘market forces’. What is so puzzling is why even the publicity seeking mayor like his Westminster colleagues is so eager to embrace this culture of ‘political dwarfism’.

Politics should be about doing, however British politics is about not doing, postponing decision making to the distant and ever receding future or making ‘faux’ decisions. (A decision that turns out to be less than it appears, often nothing more than ‘soundbite’). If decisive action is ever taken its at the behest of some superior force, either the world’s superpower or more usually a large business corporation. So eager are our politicians to embrace insignificance that they are negotiating the Transatlantic Trade and Investment Partnership. This a treaty that will give business corporations a major voice in policy making and the power to veto decisions they dislike. When the treaty is in place, business corporations will be able to bid to run various public services and if denied the that opportunity they can sue the government for compensation for lost revenues. A good example of this is the private health care provider who is suing a local health care trust for turned down their bid. The bid was rejected because because the price was too high. They are asking for a judicial review of the decision because in making its decision the health care authority had not taken into account the private health care providers need to make a profit. Quite probably in the near future private corporations will be deciding what public services will and should be provided by them. The only role for the government will be to sign cheques promising tax payers money to these corporations.

Probably there any many reasons for the popularity of adopting ‘political dwarfism’ as a persona amongst our current generation of politicians. The one most normally cited is the popularity of Neo-Liberal ideology, which relegates politicians to the role of bit players on the world stage. However explanation that interests me is language and the culture that determines how politicians use that language.

Contemporary Political Language

Greek philosophers originally put their philosophy into verse believing that the language of poetry was the best means of explains the ultimate truths of existence. In contrast political language today has very different functions rather than being the language of challenging truths its that of complacency, one of non enquiry, the means for reciting pre-agreed truths and pre-agreed propaganda. A language that obscures and hides truth. The current Chancellor of the Exchequer is a master of rephrasing his language to hide the failure of his policies. We are living in the fastest growing economy in the developed world according to his speeches. What is hidden is that it’s a recovery of statistics, a sleight of hand to hide the emptiness of his political rhetoric. The recovery is a debt led property boom, inflating property values and the property trade, which generates an inflationary increase in national incomes, demonstrating what appears to be a rise in the average incomes of all. Yet the truth is that for the vast majority there has been no increase in incomes, either they are experiencing slow or no growth in their incomes, or working for poverty wages.

One would expect the opposition to make the most of this growing inequality and inequity in incomes, yet all they can offer is a ‘faux’ policy alternative. They will generate a faster growth in the economy, which will boost incomes for all. However it is a policy so light on detail that it is practically meaningless, more a hope than a policy. Politicians seem to have lost the ability to express meaningful truths in language, language for them is the language of non truths, the language of evasion and obscurantism.

Why this decline in the spoken language?

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Politicians have always used language for propaganda purpose or evasion or what parliament calls dissembling (lying), but it was never in the past the predominate use of language. This example provides an interesting illustration of this. When a young man was asked by Lloyd George at house party what he hoped to do with his future, he answered that he was undecided between a career in the navy and politics. Lloyd George advised him to go into politics as he would experience more ‘boardings and mutinies’ than he would in the navy. This politician had a reputation for deviousness, he was the Welsh wizard, yet he introduced the beginnings of the welfare state and led Britain to victory in a world war. Today’s politicians could probably match him for deviousness, yet not for vision. His vision came from an upbringing in Welsh baptism, that imbued him with a sense of justice.

If I can go back to Churchill I can make the point more clearly. Churchill would have studied classics at Harrow and many of his contemporaries would have gone on to study classics at one of the Oxbridge colleges, whereas today contemporary politicians study PPE at an Oxbridge college. This is a significant factor as the education of today’s politicians and the past differs drastically. One classical writer studied on both classics and politics courses is the Roman philosopher Cicero, but who is treated very differently in each subject. Students of classics particularly of Churchill’s time would have seen Cicero as a heroic figure whose command of language was one to emulate. A man whose courage was matched by his oratory. The Cicero they studied was the Cicero who at risk to life and reputation defended in court a man who was the victim of a friend of the dictator Sulla. (Sulla was a dictator who had killed hundreds, when taking over the Roman Republic.) This was also the man who gave up his life to defend the restored Roman Republic. He was such a significant opponent of Mark Anthony (one of the triumvirate of politicians seeking to overthrow the Republic), that he had the murdered man’s hands nailed to the Senate door to demonstrate his command of Rome. In my politics course as is so of contemporary politics courses, Cicero was dismissed as a plagiarist, whose books were copies of better Greek originals. A man who rather than being a heroic defender of the Republic, was a man who took many ignoble actions to advance his career. In the space of 50 years Cicero had been diminished from being a man to aspire to to being to yet just another very ordinary politician motivated by the spirit of self advancement, all be it a good self propagandist. With an education devoid of heroes or heroic figures, an education that trashed the value driven figures of the past, future politicians educated in politics courses were lacking the language of value. A realist education that sees only human frailty and failure cannot but give a very downbeat view of the world.

An observer of the 19th century parliament would have noted that speeches were liberally sprinkled with Latin phrases, speakers tried to out do each other in their command of rhetoric. Observers could drop into parliament to be amused by the wit of Disraeli or the eloquence of Gladstone. The latter a man who on his campaign trails could speak to an audience of thousands for an hour or more and yet command their attention. Today’s politicians could not speak for ten minutes and hope the attention of an audience for that time span but instead they sprinkle their speeches with brief ‘sound bites’ (always of less than a minute’s duration) to capture their audiences attention.

Obviously the decline of the teaching of classics cannot be held responsible for the decline in the quality of parliamentary debates. It is just one factor but one that I think is a predominant factor. Now There is an intellectual culture that values mundanity and the accepted over creativity and originality of thought. A culture that equates any value system or ideology as a fantasy, at best useful for getting out the vote, but nothing more. This culture of mundanity goes by many names, the most popular are post modernism and Neo-Liberalism. While the first is a both a philosophy and a literary theory and the second is an economics, what they both have in common is a contempt for any value driven system, seeing instead a society of things in which values are an alien intrusion.

Why how language is used matters

Language is both a servant and a master, and it is the extent to which it is the latter that explains the mediocrity of the present political class. It is a servant when I use language to get something done, as when I order my cappuccino at my favourite coffee shop. Using it is this way has no impact on my behaviours, it’s nothing more than a request. However language is much more than a means of making requests, it is determines my perception of the society in which I live. Society is one of those strange objects that is both intangible and tangible. I know it’s there it is a given in my life, but it’s not something than I can readily comprehend. I just know it’s there, I know it’s an organised system of social relationships, whose meaning I understand through language. When I go into my coffee shop I am immediately aware that I’m entering a place of structured inter relationships. I know to order my coffee from the barista and not the manager or the chef. All have a identity disclosed in language, which tells me how I should interact with them or even not at all, as is the case with customers to whom I am a stranger. The coffee shop etiquette is something we all learn, and that etiquette is expressed in language. Anybody who fails to understand that etiquette will get bad or poor service.

Similarly the politician has come across a language which explains to them their role and that role within the greater network of social relationships that is the political system. If as at present it is the language of Neo-Liberalism, it is a language of can’t does. Neo-Liberals believe humankind has discovered the perfect social organisation, the free market and their only role is to remove any obstacles that prevent the free market operating. Consequently the voter that expects their MP to do something about the pitifully poor wage they receive is doomed to disappointment. The MP believes in the long term, in the long term the market will right itself and all will receive a living wage.

This stance of ‘doing nothing’ is reinforced by contemporary post modern philosophy that teaches that the higher moral order of which past philosophers such as Marx spoke are only the wishes of a particular age. Socialism was only had meaning in the Industrial Age of great factories, when labour protection and wage legislation made sense, because all did similar jobs in large industrial units. Now when all do very individual jobs in very different work environments, universal legislation covering all workers makes no sense and so it’s right to abolish all worker protections. Also there can in the post modern age there be no universal values as it is an age of extreme individualism. Values are relative to the individual and their unique social circumstances. Although it rarely said any notion of universal human rights is contrary to post modernism. All there can be is a democracy of rights, a competition of rights. Alistair McIntyre when speaking of a debate between two people debating the rights of their own ethical position, likens it to a shouting match. If they have different ethics, there can be no common ground between them which make any meaningful communication between them impossible. They might both be English speakers, but as for any chance of communication between them, they might as well be speaking different languages.

If the members of our political classes, particularly the leadership have been schooled at the elite colleges that teach post modernist philosophy and Neo-Liberal economics they will have been schooled in a culture that has little belief in the efficacy of human agency. Values have no place in the pseudo-science of Neo-Liberal economics and values for a post modernist are little more than an individual’s chosen life style, they have no universal validity. How can the product of such a culture, be value driven as was aWinston Churchill who had a belief not only in the rightness of British democracy, but in Britain’s unique role in the world. In an education system that excludes any education in values from its curriculum it is not surprising that it produce politicians that are only capable of having a mundane hum drum vision of the world. John Major the British PM summed up the current way of thinking, when he spoke of the need for a ‘vision thing’. He was unfairly characterised by cartoonists as a grey figure, when in fact it was a characteristic he shared with his generation of politicians.

How can such language of universal,dullness produce and thinkers of great thoughts? Whether the politician be David Cameron, Nick Clegg or Ed Miliband, all will be indistinguishable to the future historian, just a group of indistinguishable mediocrities that will fail to leave their mark on history.