Monday 31 July 2017

And profanation of the dead

Once more we have a commemoration of a First World War Battle. We have reached 1917 and the so called “Battle of Passchendaele”. What we haven’t reached is any sort of understanding of what the battle was about, what happened and why. This is reflected even in the name of the battle. The First Battle of Passchendaele didn’t begin until October. The Second Battle of Passchendaele began in late October and continued into November. What we are commemorating on the 31st of July is the beginning of the Third Battle of Ypres. This campaign began with the Battle of Pilckem Ridge. Of course, no-one will mention anything about this. All we will get is cliché about mud and futility.

The Third Battle of Ypres was not futile, nor was it defeat for the allied powers. It was part of a series of battles that ultimately defeated Germany. Each of these battles involved enormous loss of life. But this was not because the Germans, the French or the British were stupid. It was simply because we had reached a stage in the history of warfare where defence was massively stronger than attack.

One hundred years earlier during Napoleon’s campaign soldiers were mainly armed with muskets and a large mass of men could charge a defensive position and expect to succeed. This meant that a Generals task was to manoeuvre his troops so that he it would be able to successfully attack his opponent. The General who did this best won. But during the nineteenth century this changed because of the invention of breech loading rifles and latterly machine guns. Even by the end of the American Civil War, defence had become so strong that armies were reduced to trench warfare. Fifty years later with the development of the machine gun it became simply impossible for a large mass of men to charge a defensive position and expect to meet success.

Why didn’t we have a repeat of trench warfare in the years between 1939 and 1945? The answer is that in the period in between technology developed again so that we had effective aircraft capable of supporting attacking troops and we had effective tanks capable of breaking through a defensive line. This brought manoeuvre back into warfare.

The Generals of the First World War had neither effective aircraft nor effective tanks that could operate in all conditions. These things were developed during the course of the First World War, but they had not yet reached the stage of being able to break through a defensive line on their own. The only effective ways of breaking a defensive line that these generals had were artillery and troops.

During the course of the First World War the various armies developed and changed artillery and attack tactics. These became progressively more effective. Unfortunately they had to learn by experience. This experience, otherwise known as battles, was not futile. Only by fighting the Battle of the Somme and later battles such as Third Ypres did the British Army learn how to win. By November of 1917 when the Second Battle of Passchendaele ended with Allied Victory the British had developed “bite and hold” tactics for which the Germans had no answer.  In desperation the Germans attacked in March 1918. Their attack met with initial success and they too developed innovative tactics. But their offensive ultimately failed, because they could not finally break the allied line.

By 1918 the Allied Armies had more or less perfected the method by which they could break the German line and they proceeded to do so from July 1918 until November. In this way the Allies decisively defeated the German Army in the field. But they didn’t do out of the blue. They did so because of the battles that had gone before. Without these, there would have been no victory in 1918.

I tire of commemorations that show zero understanding of the First World War. They are not commemorating anything as they don’t even know what happened. How can you remember if you don’t know what you are remembering? I’m sorry this is not remembrance it is “profanation of the dead.”

These men did not die in vain. Instead they won the greatest victory in British history. The British Army of 1918 was the best Army we have ever had. It had the most up to date tactics, the most brilliant and brave soldiers and it succeeded.

We have become so used to defeatism and pacifism that we forget what we were fighting for between 1914 and 1918. We were fighting for exactly the same thing between 1939 and 1945. The First World War was about preventing an undemocratic tyranny (Germany) from ruling Europe. The Second World War in essence was about exactly the same thing.

We went to war in 1914 because we wanted Belgium to free. We went to war in 1939 so that Poland should be free. We did not want either of these places to be ruled by Germany. We wanted them remain free, sovereign nation states who had the right to say to Germany No.

Preventing undemocratic powers from ruling in Europe was our war aim in 1917 and in 1944. That is why we fought. Unfortunately we lost the peace. Poland and Belgium are part of an undemocratic Empire that is in effect ruled by Germany. The German war aims of 1914 and 1939 have more or less been achieved. Germany dominates and what Germany wants more or less happens. The Governments of small countries are overruled. Their Prime Ministers are appointed and in the end they have to do what they are told. We have the illusion of democracy in Brussels but it is no more than the illusion of democracy that could be found in Berlin in 1914.

We must remember what our soldiers fought for at Ypres and why it mattered that they succeeded. They fought so that Britain would not be ruled by any tyranny and would not be dominated by foreign powers. That is why these wars mattered.

Europe is once again dominated and democracy threatened. Poland is once more part of an Empire only now that Empire is from the West rather than the East. But once more the British have escaped. We got into are small boats and we crowded onto the piers that stretched into the channel and pointed to our island home that would allow us to fight on for all those who had seen their freedom crushed.

We do so again. So let us remember this. Brexit was a great victory.  It was a continuation of the same fight that we have been engaged in for over a century. Unfortunately there are still those who wish to side with our opponents and would prevent our example from freeing Europe once more. Some of these people pretend to remember our dead today. They do not remember them, they do not know them or understand them. They only profane them. 

Saturday 29 July 2017

Turning gold into base metal

 There was a period in British politics where we all more or less agreed with each other. Tony Blair was a somewhat more Left-wing Thatcherite, while David Cameron was a somewhat more Right-wing Blairite. The two main parties shouted loudly at each other, but this just hid their fundamental agreement about nearly everything. At this point voting became largely a tribal matter. Did I belong to the red team or the blue team? In the end, competence or the lack of it mattered more than policies. Either party’s policies might lead to good results so long as the people in charge knew what they were doing, for in essence the policies didn’t differ. Each party simply agreed that the task was to grow the economy as much as possible and to then spend as much of that growth on the things that the voters wanted. But the age of agreement is over.

The dismantling of the consensus came about because of the referendums. The Scottish referendum taught the whole of Britain that politics could be divisive and that people could disagree about the fundamentals. Here was a choice that would lead to two radically different futures. Either Scotland would become independent and the United Kingdom would cease to exist or it wouldn’t. Suddenly politics mattered. The result mattered. There was no use pretending that each side believed the same as the other. They didn’t.

We had a further taste of division during the EU referendum. Again politics mattered. People cared about the result. Two different futures were being presented for Britain. No-one could pretend that the two sides agreed. They didn’t. They each presented a different vision of the future. Politics had become binary again. It had become a matter of Yes and No, Leave and Remain.

The British electorate gained a taste for difference. It became used to fundamental disagreement for the first time in decades. It expected political parties to differ and rewarded this difference. Once more we have a truly Left-wing Labour Party. Political commentators decided that a Labour Party with Jeremy Corbyn as leader were no hopers who couldn’t possibly defeat the mighty Conservatives. The majority of Labour MPs who continually tried to get rid of Mr Corbyn agreed with this commentary. But they all ignored that the public had come to like the fact that politics mattered and that it was about fundamental disagreement. The cosy consensus looked like an establishment stitch up.

It is for this reason that we must rethink the whole debate from the ground up. We must go back to first principles. Labour now has a clear ideology. Well so too must Conservatives be clear about what we believe and why we believe it.

David Cameron wanted to rebrand the Conservative Party, while Theresa May thought if only she could steal a few of Labour policies she would be bound to win over Labour voters. But neither has been willing to explore what Conservatism really is, nor have they been willing to really defend the essence of Conservatism. Well we have an opponent now and that opponent is clear about his beliefs. Mr Corbyn does not apologise for his Left-wing views because he thinks they are correct. It’s high time we explained once more to the public why Mr Corbyn and the Labour Party are wrong. It’s also high time we defended Conservatism both intellectually and morally. Only in this way can we begin to persuade the public.

To understand a thing you have to grasp its essence rather than its accidents. Too often we are blinded to the nature of a thing by qualities that are merely accidental. Many subjects are filled with jargon and with theorising that pretends to explain but actually seeks to confuse. This is especially the case with economics. It is this above all that makes it so dismal. It is vital to strip away the complexity and the best way to do this is to return to the subject to its roots.

What is the debate about EU membership really about? It’s about sovereignty and trade. Remain supporters think that it is worth it to share sovereignty with the EU because this benefits our ability to trade with Europe. Leave supporters think that it is not worth it and anyway we can trade freely without sharing sovereignty. That’s it. There is quite a lot of noise about other issues, but fundamentally the argument is one about trade. But has anyone actually looked at what trade really is fundamentally? As always it is necessary to return to the beginning.

Why do we have trade at all? At one point in human history there was minimal trade. We all hunted what we saw and gathered what we could find. But development depended on the idea that people would do different things. In this way one person would begin tilling land, while another would hunt animals and still another would go fishing. The person who grew crops would trade with the person who hunted the animals. Later as prosperity increased the person who built a wheel might sell what he made for food. The fundamental reason we have trade therefore is division of labour. I use my time and effort to do one thing, which means I don’t have the time to do something else. It benefits me to be able to sell the result of my labour for something I can’t make. But does it benefit only me? No it benefits the other person too. The person who spends all day hunting animals doesn’t have time to grow grain. So he benefits too.

This sort of society may seem very ancient and primitive, but it was common at least until the nineteenth century. Think of settlers who made their way to Oregon in the 1840s. The success or failure of each person depended primarily on his own endeavour. To begin with each settler would have focussed primarily on crops and hunting, but in a short time division of labour would have arrived because people needed blacksmiths, shop owners and teachers.

The Government barely impeded on these people’s lives. It was thousands of miles away in Washington. There would have been a common effort to defend each settlement and no doubt the elderly and sick would have been looked after. But there would have been minimal sympathy for those who didn’t want to work or who drank away their wages. No-one would have expected to have been paid to do nothing. The “welfare state” was simply the kindness of your fellow settlers. They might feel a responsibility to look after you, but you didn’t have the right to it.

Inequality is a feature of such a society. Some settlers would do better than others. Some would work harder, some would be lucky. Over time as property is handed down this inequality would increase. It would also increase due to fundamental features of division of labour. If my skill is scarce, I can charge more for it than someone whose skill is common. If I have something to trade that is rare and in demand I can charge more for it than someone who has something that can be found without much effort.
When division of labour begins the means of exchange might be barter. I might exchange my grain for your venison. But what I am exchanging is perishable and therefore not a source of lasting value. In order to trade beyond the immediate community is necessary to use something that lasts. Initially this might be something that both sides of the transaction agree to be precious, such as pretty shells, diamonds or gold, but eventually as society develops according to the principles inherent in division of labour we arrive at money.

Money depends on confidence. I farm grain and sell it to someone else who gives me money. I then use that money to buy something that I can’t myself make. If I could not use the money I gained from selling to buy something else, I would not sell. I would keep the grain for myself. The whole transaction, the whole ability to move beyond barter depends on this confidence.

Trade in essence is simply the development further afield of the concept of division of labour. Firstly I pay my neighbour to fish for me, but later I pay someone who lives further away to sell me beaver pelts that I can’t even find where I live. In each case I am paying someone else to work for me.

There is a reason that Elizabeth the First sent ambassadors to meet Ivan the Terrible. It was a difficult journey, but the Russians had something that the Elizabethans wanted and couldn’t make for themselves. The Russians had furs. But the merchants who came from England to Russia brought with them things that the Russian’s wanted. These were manufactured goods or they were resources the Russians couldn’t themselves find or else they were money. The transaction only worked because the Russians could use this money to buy something else from someone else. The whole thing depended on confidence and trust.

Money is not in itself inherently valuable. Even gold and diamonds depend on confidence for their value. If an unlimited supply of gold were to be discovered, gold would cease to be valued. Alternatively if people simply decided that a soft yellow metal was no use to them then the value would collapse. If that is the case with a soft yellow metal it is still more the case with fragile pieces of paper.

So why go to all the trouble of making contact with civilisations that are far away in order to trade with them? Well I get things my society can’t easily make, but I also get money for the things that I am able to sell. This money I can use to buy other things that I can’t easily make. In essence I use my money to pay the wages of someone far away. He works for me, while when he buys what I make, I work for him. When we cease to buy from each other we in effect sack each other. It is all just the principle of division of labour, but instead of dividing the labour of a settlement we are now dividing the labour of the world.

The process of trading doesn’t just involve exchange, it involves profit. The Russians hope to sell their furs for bit more than the cost involved in hunting them. The English hope to sell their manufactured goods for more than it cost to make them. Who gains from this trade? Both sides do. If this were not the case then it is always likely that either side would consider the situation to be unfair.

Of course there are other ways to gain what I want other than trade. If I am stronger than my neighbour I could simply steal his meat or fish rather than trade for it. A country too could decide that it will simply conquer a neighbour rather than buy its goods. But there is a cost benefit issue here. Stealing is risky. Eventually I am liable to meet someone stronger. Anyway if everyone steals, society is unlikely to be peaceful and prosperous. The same is the case with countries. War is expensive. Worse still War is risky. I might lose. But most importantly of all if both sides gain from trade, war is unnecessary. If both make a profit, we all end up doing better than if we simply took from each other.

Trade is a function of the basic capitalistic nature of human beings. We each work in order to gain the things we want. We trade because we cannot get all the things we want by our own work so we use money to get others to work for us. Each of us is an employer. When I have my cabin and I want to trade with my neighbour, do I need to ask him to move in with me in order that we might trade? Obviously not. When people in two countries trade is it necessary that they have the same ruler for this trade to be mutually beneficial? If that had been the case, then trade would have required war. It would have meant that the Elizabethans would have sought to conquer the Russians in order to buy their furs. But far from causing war, trade makes war less likely. If trade benefits both parties why risk damaging the benefit by attacking the country that provides it? The idea that trade requires someone to rule over someone else turns trade into a matter of conquest. But this is to misunderstand the nature of trade. There is no need to conquer because trade benefits both of us, all of us.

At the dawn of trade when it was simply a means a matter of barter with my neighbour it didn’t matter that what I traded was perishable. Fish might rot, grain might spoil, but the traders would eat these things quickly. But when trade developed and became a matter between people who were far apart and who would never meet, then it was necessary to develop something that would not perish. It was necessary that we had something that kept its value. The problem we have today is that since 2008 we lack this something.

The financial crisis that began around 2008 and which continues pretty much unsolved is fundamentally about how money has become debased and has ceased to be a long term store of value. Where can I invest safely in order to guarantee a return greater than inflation? Of course I can beat inflation quite easily, but only if I am willing to take a risk. I can buy gold. But the gold price is very volatile. Investing in gold is one of the easiest ways to see my investment half in value over the course of a year, or alternatively double. I can invest in property. But property is a bubble that sees physical things, bricks and mortar double in price every few years. It is artificially held up by governments desperate to keep property holders happy. The rise and fall of interest rates are governed in part by the need to enable home owners to continue to pay their mortgages. But anyway we have seen from the examples of Ireland and Spain that property is not necessarily a store of value. Properties there lost half their value and were impossible to sell. We are very lucky indeed that the same did not happen here.

A combination of stocks and bonds held in as diversified a way as possible is the best hedge against inflation and the biggest chance of money retaining its value, but it comes with risk. The stock markets have been inflated artificially by central banks, while government bonds have ceased to be safe because government debt has risen to the stage where no-one expects it to be repaid. There will either be slow default by inflating the debt away, or quick default when investors cease refuse to loan to governments for this reason.  Neither stocks nor bonds are safe in the face of another financial crisis like 2008. The only alternative left is to hold cash in the bank, but with interest rates lower than inflation I am simply losing money gradually. Moreover who is to guarantee that if a bank fails its customers will be bailed out? Governments may guarantee, but what if debt reaches a point where investors cease to trust governments?

Since coming to power in 2010 the Conservative party has supposedly imposed austerity on the country. In fact it has done nothing of the kind. We still spend more than we earn and every day the size of our overall debt increases. In order for the Conservative Party to move forward it has to genuinely distinguish itself from Labour. It has to first cut the deficit to zero and then strive to eradicate the country’s debt by having us actually make a profit. A Conservative Party that leads the country to make a loss, as it has been doing for the past seven years, is not really conservative at all. It is simply mimicking Labour. It may not be mismanaging quite as badly as Labour did, but the difference is only one of degree.

If we were a small business we would have gone bust long ago. We are kept afloat merely because we are a country with a long history of repaying its debt and because we are able to create money ex nihilo. If a small business kept going in this way, by for instance setting up a printing press that printed pounds the owner would go to jail. But this the fundamental flaw of finance. If an individual trader working for a bank does something dubious, if he cons his customers or manipulates the market in an unfair way he will go to jail. But if the head of that bank develops policies that do the same thing he will get a knighthood if he succeeds and a large pension if he fails. In the same way governments are allowed to what would put individuals in jail. They are allowed to debase the currency.

The problem is this. Money is only a confidence trick. None of the things that we exchange have inherent value. As soon as people cease to have confidence in the means of exchange they cease to exchange. The correct response to currency inflation is to horde or else to barter. Why would I trade with someone far away if he gives me something that will perish? It is the equivalent of getting back rotting fish.

The essence of the difficulty can be explained in this way. Governments around the world faced with debts that they could never pay, because their electorates would never accept the “austerity” needed to pay them have only one choice left. They inflate away the debt. The key however is that they do this sufficiently gradually that no-one notices. The public would never accept so called cuts that left them losing half their income, but if their money loses half of its value over the course of ten years the public is blind to the fact. Finance develops complicated ways and arcane language to explain what it is doing, but the purpose really is to mystify. Just as lawyers write laws that only they can interpret because they are unclear and use words that no-one else knows, so too in finance we have to learn knew vocabularies such as “quantitative easing” and “option swap”. The whole process of stock markets and finance is deliberately made so complicated that none but the high priests have any clue about what is going on. The mystery is crucial, because without it the whole house of cards would come tumbling down.

Confidence in currency is only maintained because of lack of understanding about what is happening. When faced with the financial crisis of 2008 most people were scared but didn’t even try to understand. All they wanted was reassurance and for life to go on more or less the same. This was achieved. The process of QE worked, up to a point, the economy kept going, confidence was maintained even as our debts reached a point where we couldn’t even theoretically pay them. But nothing was solved. We are still not living within our means. We still have debts that we can’t pay. Meanwhile none of us have a risk free store of value. Why then do we trade? Because for the moment confidence is retained. The reason for this is that the Central Bank response to 2008 to a large extent worked. Debasing the world’s currencies, printing money and the continual attempt to have a lower exchange rate than your neighbour has led to the patient continuing to live. But we have not been able to ground our economy on bedrock. No-one has. The risk is as great now as it was in 2008, more so really because debt levels are higher and we haven’t a long term strategy to remove or even lessen the risk. We have successfully been smoking in a gunpowder factory congratulating ourselves on the fact that none of the matches we throw on the floor have blown us up yet.

If I build a house and it doubles in price after five years, I am delighted. I feel rich, I can go on expensive holidays and spend what I please. If in the next five years it doubles again I feel super rich. I must have done very well. I must have worked super hard to be so successful. But bricks and mortar don’t grow. This sort of growth is simply a bubble. For as long as it continues there is confidence. Why not? We are all getting rich. But the whole proposition depends on the idea that something like bricks and something like mortar can continually double in price indefinitely. This is self-evidently false. It is simply a Ponzi scheme that depends on confidence. Governments can prop up economies and generate growth by printing money. So long as we all feel wealthy there is no problem. But it is the same confidence trick. It is the same Ponzi scheme. It is not grounded in sound money. We lack a long term store of value. We only think we have it because it is being debased slowly. The confidence that keeps everything going is dependent on governments and central banks debasing the currency still further while keeping the public happy with a house that is built on sand.

It may be that there isn’t a problem. Money is fundamentally a matter of confidence. It may be that economics has been built on sand ever since we began to trade with people far away. Gold has no more fundamental value than paper. The bedrock is the things that I need to survive, food, shelter, warmth and the things that give me meaning in my life and make it comfortable. These are the same fundamentally today as they were when we lived in caves. Only time will tell if the latest confidence trick in the history of economics can be sustained. But we are all in the same difficulty. Most of the major economies of the world have been in the same crisis since 2008. We keep going by having confidence in each other and by trade. This is the confidence parcel that we pass and we must continue to pass it and the music must never stop. If it did we would wake up to a world where there wasn’t any confidence at all and therefore there wasn’t any money at all.

It is in this context that we have to try to understand the present relationship between the EU and the UK. For all its fundamental economic faults shared with every major economy the UK remains the fifth largest economy in the world. We need to trade with the EU in order to maintain our prosperity and also to keep the game of confidence going, but so too do they need to trade with us. At the moment the EU sells rather more to Britain than the other way round. Moreover many more EU citizens want to work in the UK than UK citizens want to work in the EU. Our citizens tend to retire to Spain, but few indeed are the Brits who work in Poland.

The fundamental of the relationship between the EU and the UK is that we are a market that they need. Moreover, we don’t have to buy their goods. Mercedes are nice cars, but they are not the only cars. We could buy from Japan or Korea and just as easily drive to work. Many of us could not tell the difference between a red wine from France or one from Chile.

But more importantly as has become clear, trade benefits both parties. It gives each something that they want and can’t make themselves and it provides each with a profit. The UK economy is vulnerable to shock, but so too is the EU economy. Neither needs any sort of trade war as it would simply damage each of them.

The failure of one bank that no-one had ever heard of in 2008 brought the world economy to its knees, what would the failure of the fifth largest economy look like? Alternatively what would the failure of the eighth largest economy (Italy) do to the economies of Japan, Britain and the USA? We are all in this confidence trick together. We cannot hang separately because we all will hang together.

There is a lot of posturing in the negotiations between the EU and the UK and there is a lot of negativity from those Brits who wanted us to remain in the EU. But the fundamentals remain clear. You don’t need to be ruled by someone in order to trade with them freely. Sovereign nation states can have free trade agreements with each other. There are loads of these. Moreover trade benefits both parties. The EU may strive to punish Britain in order to demonstrate that leaving the EU is a bad idea, but it will simply be punishing itself. If the UK economy were damaged by this punishment, we would be able to buy less goods from the EU. Moreover, we can do quite a lot to punish the EU in return. The UK could turn itself into a low tax, low regulation competitor to the EU. We could make free trade deals with the rest of the world and do all we could to undercut the EU. We could decide that given that the EU is acting in an unfriendly way we would cease to provide it with military or intelligence security. Let them pay for these things themselves rather than rely on us.

But all this would prove once more is how much we needed each other. Any damage that the UK could do to our European neighbours would simply mean that they would buy less of our goods and services. If we were able to damage them enough we might even be able to push Italy over the cliff edge. But we are joined to Italy by a chain that would see us dragged over it too.

Given that it is not necessary to be ruled by someone in order to trade freely with them, why do we have the model developed by the EU at all? Why don’t European nation states simply develop trade agreements? The reason for this has little to do with economics and more to do with history.

Between 1870 and 1945 Germany invaded France on three occasions and the consequences of this were catastrophic for everyone. The purpose of the EU was firstly to bind Germany to France in order to prevent any further invasion and to compensate France for the decline that had begun in 1870 and which culminated in the debacle of 1940. The reparations that Germany was forced to pay from 1918 onwards had bankrupted the German economy and the next decades had not gone well for France as a consequence. A new method of paying reparations had to be devised. This was called the EU. Since the beginning of the EU Germany in effect has been subsidising France and has enabled France to maintain a lifestyle that it otherwise could not. Rather than reform along British Thatcherite lines the French have been able to work relatively short working weeks, take long holidays and retire early. They could not do this on their own, but they can with their German reparations that enable uneconomic French farming to continue without reform.

The other fundamental is that it was German democracy that gave us the Third Reich and so long as it was winning the Germans were absolutely delighted. Hitler would have won an election by a landslide if he had held one in 1940. It is for this reason that the EU was set up so as to prevent the Germans, indeed any European from having a real democratic choice. There would be the appearance of democracy, but the reality would be that all important decisions would be taken by those who could be trusted.
The nation states of Europe would never have signed up to this if it had been clear to them that they were choosing to cease to exist. For this reason a confidence trick has been played. When the UK joined the EU we were told that it was simply a trading arrangement. We would lose no power whatsoever. No doubt similar stories were told to every other electorate. But it was not true. Immediately on joining we agreed that European law would supersede UK law. Right from the beginning the intention has been that the EU would become a nation state like the USA. But this would happen gradually. So gradually that no-one would notice. We would inflate away the nation state just as we debased our currency.

Poles who had been part of various empires until 1918 would never have signed up to the EU if they had truly believed that they were joining another Empire. But that is exactly what the EU has become. The EU has joined Germany to France in the same way that Karl der Große did when he was the first Holy Roman Emperor. But then it really becomes simply a matter of counting up to four.

Germany lost the heart and soul of its country in 1945. It lost the essence of Germanness, (Prussia). Well it has got it back. The Fourth Reich stretches “Von der Maas bis an die Memel” [From the Meuse to the Memel] and indeed it stretches rather further. The German lost lands are now ruled by Germans in effect. The Poles may think they retain control, but it is Mrs Merkel who tells them who they must allow into their country and how their country must be governed. In the United States Supreme Court judges are chosen by the President in combination with the Senate, but Poles risk losing their voting EU voting rights if their politicians do likewise. Soon Poland will not even have the illusion of sovereignty. It will have been traded it for 30 pieces of Euro. The złoty [literally golden] will have been turned into the basest of metals.
But none of this applies to Britain. Historically we have not been threatened by Germany. There was no fundamental desire on Germany’s part to go to war with Britain in either 1918 or 1939. We could have avoided each of these conflicts quite easily. It may well have been beneficial for everyone if we had. France would have lost in 1914 or early 1915. It would have lost a little territory and have declined a little further. But we might have avoided the Russian revolution and 70 years of tyranny. So too in 1939. We might have been able simply to skip to 1941 and let Germany beat its brains out against the USSR without our involvement. The result would have been the same.

Why should we pay reparations to France? We haven’t fought France since Waterloo. Why should we prop them up? The EU thinks that it is necessary to pay reparations (the EU subscription fee) in order to trade freely. But we have already shown that free trade does not require this. Why should the UK subsidise France in order to trade freely with France? It simply is not in our interest to do so. The French may get angry if we withdraw the subsidy, they may for a time not want to trade with us, or punish us in some other way. But the fundamentals remain the same. Free trade does not require you to be ruled by someone else, nor does it require that you pay tribute. Indeed if you must pay a tribute it is not free trade at all.

When we joined the EU it looked like a good deal. The Europeans seemed more prosperous than us. But this is no longer the case. The UK reformed (Thatcher) and ceased to decline from 1979 onwards. Much of the EU did not reform, but instead developed protectionist tendencies.  Worse still it attempted currency union without political union. This has meant that EU growth has been much less than it otherwise would have been. The EU has declined as a market, while the rest of the world, such as China, has become vastly more important. Why pay a tribute in order to trade with a market that is anyway less important than it was? Why pay that tribute and also give up your sovereignty in order to gain less than you were getting when you joined?

The EU was designed to be antidemocratic because the history of much of Europe was one of tyranny. Democracy is very skin deep in much of the EU. There were tyrants in Spain, Portugal and Greece until the 1970s. Much of Eastern Europe has only a little experience with democracy. Both Germany and France have a taste for the strong man as leader. The EU was set up to regulate and control these places and keep them on the “democratic path”, but they could only be kept on this path by giving them the illusion of democracy rather than the substance.

But Britain doesn’t need this. We chopped the head off the last tyrant who tried to rule us and no-one has tried since. We don’t need to be made to conform to human rights because we invented them. We don’t need to be forced to trade freely or be economically liberal. We had these things before anyone else did.

There may be a short term point for Eastern Europeans to choose to be in the EU. They gain subsidy and they gain the right to work freely elsewhere. They do so at the price of being vassals, but they do at least gain. But why would the UK give up its sovereignty and pay tribute in order to trade with someone. Why have someone else tell us what our rights are when we told the world what these rights were in the first place?

The EU is following the conqueror’s model of “trade”. Why buy something from my neighbour if I can simply conquer him and rule over him. Then I get everything he has for free. Germany ultimately failed to conquer Europe by means of warfare, but it has succeeded by means of the EU. Far from preventing France being invaded and conquered by Germany, the EU has instead enabled it. Mr Macron may wave a flag that is blue and had gold stars, but he might as well have been flying one that was red, yellow and black.

But you don’t need to conquer in order to trade. This was a lesson we learned at the dawn of time when we discovered that war was costly. This is why the EU model will ultimately fail. It is as if Europeans are colonising their own continent just as previously we colonised Africa. The EU is imposing a colonial power from Portugal to Poland. It gives them money and it gives them missionaries, but it doesn’t allow them to be free. If you want the food, you have to accept the EU religion.

But Poles who rebelled against Soviet rule will not ultimately submit to EU rule once it becomes clear that it is undemocratic and that it makes Poland become no more than Vermont. This is the flaw in the EU model. It is trying to unite people who are too diverse and who lack a common identity. In the end people want to live with those who are similar and who speak the same language and have the same culture and identity. There is no European identity and for this reason the EU will ultimately fail.

The fundamentals of trade are quite simple. Once we understand them, then it becomes self-evident that it is not necessary to be a member of the EU in order to trade freely. The mistake that the EU is making is that it is trying to create a state made up of people who don’t think of themselves as being from the same nation. It is trying to merge that which has been separate and wishes to remain separate. It is trying to do this by means of bribes and by means of force.

Britain has rebelled because the fundamentals of trade mean that EU model is not in essence advantageous to us. It is unnecessary and does not provide us with enough added value. In the long term we will trade freely once more with the EU without being ruled by them. It may take a while to reach this stage. They may punish us, but it will be worth it. The problem for the EU is that once we show the other members that free trade does not depend on being ruled by Brussels, they too will throw off their colonial rulers. In this way just as the three previous Reichs failed, so too will the fourth Reich. Neither the Poles nor the Portuguese will submit to Pax Germanica when the Brits show that it is neither necessary nor desirable. The very nature of trade shows that they have no need to do so.

Equality or freedom

What is it that distinguishes people on the Left and people on the Right? We now have two party politics again. But what is the choice between these two parties fundamentally about? The answer can be summarised in the following way. Conservatism is about what is. Liberalism/Socialism is about what ought to be. For this reason Conservatives seek to protect what is, while the Left seeks to overturn it. Conservatives think that the fundamental structures of society that have developed over centuries should be respected and that progress should be gradual. The Left is dissatisfied with how society is at present and wishes always to change it radically, decisively and immediately. The basis for Conservatism is respect for human nature as it is. We have the society that we have because of human nature and the faults in society are due to the faults of human nature. The Left on the other hand is dissatisfied with human nature and seeks to reform it. Only in this way can it radically change a society that is grounded in human nature.

It is fundamental to human nature that we are unequal. In any primitive society you will find hierarchy. Likewise if  you took one thousand modern human beings and put them on an isolated island, left them and came back after a hundred years you would find inequality. Some people are more intelligent, stronger, more ruthless or have more charismatic personalities than others. Some people are fit and healthy, beautiful and popular, others are not. Some people have skills that are uncommon and which are necessary for society others have much less to offer. Society is fundamentally unequal because people are unequal. The Right accepts this as a fact and tries to work with human nature. The Left is dissatisfied with the inequality of human nature and seeks to create a better society by means of creating a better human being.

The motto of the French Revolution, liberté égalité fraternité [liberty, equality, fraternity] involves in fact only two things not three. Equality and fraternity are obviously the same thing. It’s the same idea as found in Schiller’s “Alle Menschen werden Brüder” [All people become brothers]. At present my brother or my sister is someone in my family. I prefer this person to someone who is not in my family. But heaven on Earth or Schiller’s Elysium happens when everyone in society is equally my brother and I cease to make the distinction between family and anyone else in society.

The problem for the French and for every other revolutionary movement is that people do not want to become brothers. We wish to retain our hierarchical structure whereby I have talents, gifts or qualities that make me more successful than you. A handsome man who has his pick of pretty women, does not wish to become equal with those who don’t. If my skill at fishing means that I can catch one hundred fish why should I give most of them to the person who has no skill at fishing or who is lazy and who catches none? It is for this reason that the motto of the French Revolution involves a contradiction. It is only possible to achieve equality/fraternity through compulsion. But what is compulsion other than loss of liberty?

It is not accidental that the French Revolution or the Russian Revolution or the Chinese Revolution led to terror. It is a feature. The attempt to eradicate inequality and create a utopian brotherhood of man will always involve those who are more talented, stronger and intelligent being forced to share with those who are less talented, weaker and unintelligent. Some may choose to share, but the majority will not. It is human nature to seek advantage for yourself and your family. Human nature as it is will never lead to utopia. The Left therefore has to force us to be free and force us to be equal.

This means that we are faced with an either/or situation. Either freedom or equality you cannot have both. If we believe in allowing people to live as they please with as little interference as possible from government we will have maximum inequality, but we will also have maximum freedom.  I can then earn what I am able and spend it as I please.  Other people are inevitably going to do either better than me or worse than me.

In order to create perfect equality the Government is going to have to interfere greatly in the lives of ordinary people. Those who are successful are going to have a large proportion of their income taken away and given to those who are less successful. But both those who are willing and those who are unwilling will have to give up the fruits of their success otherwise equality cannot be achieved.

Perfect equality can only be achieved by a perfect loss of liberty. But even those who don’t want to go the whole way and achieve a socialist brotherhood of man must accept that what they are doing involves people losing their freedom. If people are completely free and left alone they will naturally form a hierarchy based on talent. But the Left, dissatisfied with human nature, will try to mitigate this. Even if the Left doesn’t want to create perfect equality it still wants to create imperfect equality, i.e. more equality than would otherwise arise. But this can only be achieved by loss of freedom. My freedom to earn what I please and spend as I please, must be curtailed because I am forced to share what I would otherwise keep. Even an imperfect level of equality can only arise by forcing me to act differently to the way I would naturally choose. The attempt to create a society that is contrary to human nature, i.e. a more equal society, can only be done by creating a society that is less free. Every step on the way to equality is a step away from freedom.

In a democracy the poor may vote to take money from the rich in order to make their situation more equal with that of the rich. The rich may be outvoted and laws created that force the rich to give a large proportion of their money to the poor. This may be described as fair. But it obviously involves compulsion. What if the rich decide to take their wealth and their talents elsewhere? If enough of the rich do this then clearly the Left’s utopian project to change human nature will fail because it requires the contribution of the talented.  The Left’s response to people trying to take their money elsewhere is usually to prevent either the people or the money leaving. The Iron curtain was not an accident, rather it was the condition for the possibility of eradicating inequality.  You can only make people equal by forcing them to stay.  

There is a sliding scale between freedom and equality. Peak equality requires complete loss of freedom. Here we have revolutionary forms of communism. But those ideas of the Left such as social democracy or democratic socialism also require loss of freedom. They don’t require as much loss as communism, but this is only because they don’t achieve as much equality as communism does.

The Left argues that what is important is equality. There is in the West a fetish about equality. Whenever something is found to be unequal it is condemned. How dare some newsreaders earn more than other newsreaders? How dare some people have the right to do something that others do not? Equality is such now that “men” must be allowed to have children and choice must neither be limited by reality nor by nature. Everyone can be what he or she wants himself or herself to be and words must mean what I choose that they mean. The lame walk, the blind see, a man can marry a man and then give birth. All of these miracles are because all must bow down to the god/goddess equality.

The folly is that the Conservative Party far from defending the essence of Conservatism has been striving to do the Left’s job for it. The Conservative view ought to be simply that inequality is a function of human existence. A man cannot marry a man for the simple reason that he is a man. A man cannot give birth because he is not a woman. This is what these words means. This is the human nature that is the bedrock on which we build the foundation of our society. Alternatively we overthrow our society by overthrowing the meaning of ordinary words. “Man”, “Woman”, “marry” are words with clear meanings that reflect a clear reality. A man cannot become a woman any more than he can become a Martian or a dog. We may pretend that this man is a woman, but in reality the word we are looking for is “Eunuch”. The demand for equality, the demand to be able to do what our nature forbids, does not change the reality, but it may distort it. It may mean that we lose sight of what is real, because we end up lacking the words to describe it.

This is how the Left seeks to reform human nature. A Conservative who goes along with this or seeks to lend a hand is quite simply not a Conservative. He is in the wrong party and should leave.

Some people are paid more because they are more popular, more talented, or more beautiful. The only way to change this is if people become less free. Conservatives should become the champions of freedom and point out that the fundamental idea of Labour and any other left-wing party is to take away our freedom to be as we please. Instead absurdly the Conservative Party seeks to imitate the ideas of the Left rather than champion the ideas of the Right. Given a choice most people prefer to be free. Most people prefer freedom to equality. It is for this reason that the Left requires walls to maintain its equality.  

Freedom is an attractive idea. All human beings naturally want to be free to live as they please and to be as successful as their talents allow. This is the essence of being an individual rather than part of a socialist collective. Equality can only be achieved at the expense of my individuality being dissolved into the brotherhood. This is called levelling whereby what distinguishes me is erased because it creates difference. But difference is what makes me the individual that I am. Equality in striving to minimise difference ends up minimising me. It is for this reason that Left in the end always ceases to care about the individual and the freedom of each individual. This is not accidental. It is rather a feature of all Left-wing thinking. It is the mentality of the hive rather than the mentality of the freedom loving individual. There is nothing attractive for individuals in being forced to become worker drones.

For this reason it is high time that Conservatives argued for Conservative ideas and pointed out that equality can only come about through compulsion. You might think it is a fine idea to compel the rich to give up what he has earned through his talent, his skill and his good luck, but if you go down that route you will eventually find someone has taken away your freedom too. 

Saturday 15 July 2017

Socialism is theft

In order to understand a thing you have to strip it back to its essence. The fault of too much political thinking has been that it is too abstract. It tries to impose a theoretical system on human nature rather than accept human nature as the basic building block. This is especially the case with the political ideas of the Left and it is the reason the same pattern follows whenever they are implemented. Finding that socialism/social democracy comes up against the ordinary human nature of the workers, the Left requires that human nature changes. The theory is correct therefore it is the humans who are in error. But finding that people prefer to be in error the Left attempts to enforce change. It does this first through law, but if it meets opposition, being convinced that the goal of socialism is worth it, the Left resorts to force. Everything follows from the failure to understand and accept the essence of human nature.

Why do you go to work? People have different reasons and it sometimes depends on the job that they do. Some people claim to love their job so much that they would do it even if they were not paid. But there are few indeed of us who would like to live without any sort of income. If I won the lottery, I might decide to quit my job. But I would only do so because I would think that I could maintain my lifestyle without that job. For the vast majority of people, the reason why we get up every morning is so that we have an income and so that we can spend that money on things that we want and need.

Who do you spend your money on? The answer to this is simple. I spend my money on myself and on my family. What proportion of your money do you choose to spend on anything or anyone else? Well, if you think of this proportion in terms of household expenditure, you will find that most people spend a very small proportion on anyone other than their family. Out of each person’s disposable income what proportion is donated outside the family? Some people are indeed very generous, their generosity sometimes increases with their affluence, but even so it is still the case that for the vast majority of people an overwhelming proportion of our disposable income is spent on ourselves and our family.

Why do we encourage children to get a good education and why do people who work seek first a good job and then a better job? Why do people seek promotion in their work rather than just remain at the level at which they begin? Again there can be a variety of motives. We might hope that our children have a more interesting job because of their education. We might think that education makes life more worthwhile and interesting. We might want to do more good by being promoted. All of these things may be true, but if we are honest, most of us will reflect that we want a good education in order to get a job that pays well, we want promotion because we want our pay to increase and we want all of these things because we want to provide our families with a better lifestyle.

I know someone who was working as a cleaner. She was earning the minimum wage. She decided she could do better by working for herself. To begin with she was actually doing rather worse than when she was paid by an employer. Now that she had her own small business, she found that for every hour she wasn’t working she was paid nothing. But when she was working she could charge more and the amount that she was paid went to her business rather than the business of her employer. There was an element of risk in setting up her own business. There was the cost of equipment and the risk that she would not be able to find customers. She had to manage the accounts by herself and deal with some complex government rules and regulations. But gradually her business grew and she ended up earning more than previously. Why did she do this? Why not just earn the minimum wage? The answer is obvious. She wanted to earn more in order to provide a better lifestyle for her family.

At root the basic motives of nearly all of us are capitalist. We work for the sake of ourselves and our families. We hope to earn more by obtaining better qualifications and gaining promotions or by setting up our own businesses.

Out of your earnings what proportion do you keep and what proportion is taken away? This will depend on what you earn. But add together all of the tax that you are charged, income tax, property tax, national insurance, VAT etc. and you will find that it amounts to a significant proportion of your income. I don’t know the exact figure, but my guess is that it amounts to greater than 40% of everything most of us earn.

Which of us goes to work every day in order to pay this 40%? We may be happy to pay tax. We may think it reasonable to do so. We may support political parties that favour higher rather than lower taxation. But do we work so as to pay this tax? Is the reason you get up every day so as to contribute to the general wellbeing of society? Do you work in order that the Government can fund unemployment benefit and so that it can build schools and hospitals? We all think that these things are a good idea, but is that your motivation? If it were, we would have no need for tax.

If everyone were motivated primarily by the desire to provide society with what it needed, then we could at the end of each month decide to simply donate 40% of our earnings to what society needed. There is absolutely nothing preventing us all from doing just this. Why have taxation at all? Everyone knows that we need the Government to spend public money. Why not simply donate it?

Rich socialists like J. K. Rowling could bring about their goal quite easily simply by retaining whatever proportion of their wealth they needed and giving the rest away to the Government. This unilateral form of wealth disarmament would make society just that little bit more equal. Why doesn’t everyone on the Left simply give all they have to the poor? Think of the example that it would set. It would be just like unilateral nuclear disarmament. Soon everyone else would follow this example.

But no. The reason Rowling doesn’t give away all she earns to the poor, is that she fears no-one else would. The reason we have taxation is because we reflect that if we made giving money to the Government optional few indeed would be the people who would give it.

You don’t work in order to pay tax. At least the vast majority of people don’t. The reason for this is that if you had the chance, you wouldn’t pay tax. This is the case even when you recognise that it is a good thing for governments to spend money on public services. You still would rather spend that proportion of your money as you choose.

It is not property that is theft, rather it is taxation. If I go to your house and take away 40% of the things in it, I will quite rightly be called a thief. But if I vote for a political party that wants to take away 50 or 60 % of what you earn and eventually make everything a matter of public ownership I will not be called a thief, rather I will be called a socialist.

No-one is preventing people on the Left from giving away their income. No-one is preventing them from sharing what they earn with others. Each socialist could do each of these things immediately. What they want is for everyone else including themselves to “give away” what they earn and to share what they have. The Left recognises that human nature is capitalist and for this reason always wishes to achieve its goal by means of compulsion.

Given that human nature is capitalist, that is, we work in order to better our own lives and those of our families, why is it that so many of us vote for political parties that are not capitalist? This question is of especial importance at the moment for more than 40% of the population has just voted for a party whose leader in effect is a revolutionary socialist. Make no mistake Mr Corbyn may seem like a cuddly, beardy grandfather, but his goal is exactly the same as all the other socialists who tried to implement their theory in the past century. The means by which Mr Corbyn wishes to achieve socialism may or may not differ, but the aim is the same. In the end the means won’t differ much either. Socialism always comes up against the capitalist nature of humanity and compels humanity to change. Nice Mr Corbyn too would force you to be equal, for the simple reason that the goal of equality can only be achieved by compulsion. It is for this reason that socialism is essentially a totalitarian philosophy.

Why would people who work in order to earn money for themselves and their family vote for a political philosophy that is the antithesis of their own motivations? Some of them do so out of self-interest. If you earn very low wages and are either unable or unwilling to seek a better job, then it may at least in the short term be rational to vote for socialism. The same calculation may apply if you can’t or you won’t work. People who don’t work or who earn very little pay only a little tax. If I pay only 20% of my small income in tax, it might look like a bargain if I make someone else pay 60%. That person's paying more might mean that my unemployment benefit rises or my minimum wage increases. Likewise if I have debts due to tuition fees, I might be very glad if someone else had to pay the debt rather than me.  Voting for something that makes me better off would not usually be described as altruistic, but because I am a socialist I can feel virtuous even though I am in fact taking rather than giving.

People who vote for socialism because it will make them materially better off are of course not acting morally. They are acting selfishly. The only people who are not acting selfishly when they vote for socialism are those like J. K. Rowling who are rich and who are willing to pay more tax knowing that it will make them worse off. But if I have a fortune of hundreds of millions, even losing 50% of it will still leave me hundreds of millions. This is a rather easy form of selflessness. Best of all it gives that warm glow of virtue that will outweigh any material loss. The desire to feel virtuous and appear virtuous to others is, of course, another form of selfishness. 
But the rich socialist’s “selfless” choice of voting for higher taxation is at the expense of all those who really don’t want to pay more to the Government. It is “forcing them to be free”. It is this that makes socialism immoral. Morality depends on my having the free choice to give away what I earn and to share with others. Socialism makes this a matter of compulsion. “Give all you have to the poor” says Jesus “and follow me”. But I’m sorry Jesus I can’t give anything to the poor, because they Government took it.

It may be virtuous to share with those who are poorer, but Labour voters would take away the choice. They want to compel both themselves and others to give away a proportion of their earnings. But this is to destroy virtue, because morality requires that I have a choice. Socialism changes morality into law and seeks to achieve its aims by taking away my choice. In this way it destroys morality and is the antithesis of it.

The poor may calculate that socialism is in their material interest and that by taking from the rich they increase their own wealth. However because socialism contradicts human motivation, the poor rapidly find out that their short-term self-interest is contrary to their long term self-interest. Our ability to pay high levels of unemployment benefit, our ability to maintain good public services depends on the motivation of ordinary workers working for themselves. Socialism damages and in the end destroys this motivation. When I work less for myself and more for the Government, I end up working less hard than I otherwise would. In time this leads to a lessening in productivity and the economy stagnates. This means we have less to spend on schools, hospitals and the unemployed.

By attempting to reform human nature and by undermining the motivations that we all have in our daily lives, socialism undermines the foundation of economic activity. It is only because I work for myself and my family that I reach the levels of productivity that I do. Without the impulse to improve my own material situation I will simply slack. For this reason, above all, socialism damages economic growth. Why work hard, why study, why strive if the result of my effort is the same as if I did none of these things? When I wish to do better for myself and my family I seek inequality. That’s what success is. Equality means I can do no better than anyone else, no matter how hard I try. So why try? Why set up a small business? Why invent something? Why get up early rather than stay in bed? By taking away the motivation for success, socialism ends up with economic failure.  Growth declines and the amount of money the Government has to spend falls. This means that quite quickly we find that socialism makes the poor poorer.

For this reason socialism is not merely amoral because it compels and therefore prevents me from being able to choose that which is moral, it is also immoral because whatever its intention it makes people less free and lowers the average standard of living. The rich become much poorer, but so do the poor. Worse still the poor no longer have the opportunity to become rich. Socialism may well achieve equality, but the price that is paid for this is equal levels of poverty.

Only when we recognise that our nature as people is to be capitalists, only when we accept that the building blocks of society are individuals and families, only then will we make progress politically. There is no use fighting against what we are. Anyway the only way to radically change human nature is through force and compulsory re-education. It is this that you are voting for when you support Labour. 

We need to pay taxes, but it is necessary to recognise that the level should be as low as possible because people are not motivated to pay taxes, rather we are motivated by our desire to improve our own standard of living and that of our families. Lower taxes mean that each of us works harder, this in turn means the economy grows as much as possible and in the end means that the overall amount that the Government receives increases rather than decreases. In this way the economy by being in tune with human nature rather than opposing it reaches its peak level of efficiency. This benefits not merely the wealthy, but the poorest also.

Socialism is a theory that has been tested to destruction. It contradicts human nature and therefore can never work. Wherever it is tried it makes people poorer and less free. It is not accidental that socialism leads to totalitarian Government it is fundamental. People are naturally unequal and can be made equal only by force. Socialism is voting to give the keys to your house to Government so that it can control how you think and steal what you have. It is for this reason that socialism is theft.