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The Four Pillars of the EU- freedoms or serfdom?

JR Max Wheel

 

14 March 2017

 

When studying economics, it was a virtual article of faith that freedom of movement of goods and services as well as capital were an unmitigated good. This was not only “sound” Ricardian common sense about comparative advantage. that allocation of resources meant that country X would always have the capability to produce goods more efficiently and cheaply than say country Y, but that it would allow the latter to divert resources to where it had a comparative advantage, thereby promoting mutually beneficial trade. We all thus gain. That of course was the textbook explanation.

 

A similar argument is made for allowing free movement of capital this would then flow naturally to areas where it was both needed and most productive, rather than remain bottled up in nations who would in all probability misallocate it. Again, the theory is that it is a win win.

 

Recall these are textbook explanations of economic theory, sometimes they are true, deregulation can produce beneficial outcomes and help develop valuable natural and human resources which otherwise would not have benefitted.

 

Unfortunately, economic textbooks also believe in “efficient markets” and “rational expectations”, where markets price in all known facts to deliver a market clearing price. Regrettably the one fact we all intuit or may claim to know is that the human being is neither remotely rational for much of the time and that markets can be anything but efficient.

 

Freedom of movement of people can also be beneficial and has resulted in some remarkable success stories, where a persecuted minority can move and develop in a new host country to flourish and contribute to national wealth. History is replete with examples of the outright dim-witted- the expulsion of the “Moors” from Spain for religio-social and identity reasons to the Huguenots from France who settled in the UK and elsewhere and brought their skills and industry with them. The United States with its largely immigrant population is probably the most obvious example of unleashing the multiple talents of its newly “liberated” citizens, even whilst holding down its grotesque system of indentured slave workers.  There have always been moments of profound change resulting in mass migration, whether as result of religious or societal persecution or natural disaster. There is however no absolute right or guarantee that mass migration of people is a good thing, it is circumstance dependent.  The economist might assume that extra labour resources are a good thing and for several reasons, they may contribute to increased national income, they may replace economically inactive citizens with productive ones, but it is a hypothesis. The arrival of uneducated manual labourers in an automated and increasingly technologically driven society may mean that there are a limited number of real job and life chances or that resources need to be diverted to train and equip them to be productive. It may mean they are consigned to the most menial forms of labour. In short there are again no guarantees.

 

Economics as taught in much of the 20thC had elevated itself to the level of a hard science with right and wrong and provable answers to its questions. This is not so, as evidenced by its existential crisis as an academic study. It cannot be because its actors are not particles, but people and as we said people are not necessarily rational or at least for much of the time.

 

Recent history [and there are echoes of this in previous centuries] shows that large corporations can shape-shift rapidly and in doing so transfer jobs and capital to exploit market opportunities, these are not written in stone or fundamental principles, they are opportunistic moves. The rise of truly global corporations transcends the power of nation states and even economic power blocs or multilateral organizations. This has happened and is happening. Technology is equally capable of job creation and job destruction, distribution of the spoils of enterprise are neither necessarily distributed equally or equitably, nor are the costs, the destruction and pollution the so-called “negative externalities” of the economists or the bits that go wrong, despoil, or destroy habitat, damage natural systems.

 

The nation state, in many cases gave rise to democracy, which though never a universally adopted system can now be easily over-ridden, it is no surprise that the management of such corporations can disregard the interest of others. Their interests do not align but diverge, thus decisions are taken with a view to maintaining a world view and a set of values that collides with those of the citizens or electorates. Such people are by definition a nuisance and an obstacle and therefore every trick in the book is used to subvert them.

 

These are the self-same so-called freedoms enshrined in our EU power bloc. They trump national interests and because of their astounding capability of creating wealth are profoundly anti-democratic.  They were never meant to be so, but that was another world in which such aspirational and near utopian ideals were viewed as desirable, rational and the pinnacle of liberal values. They have become so deeply subverted that the victims neither see the results or if they do are powerless to prevent them.

 

 

 

 

Rebuilding a Broken United Kingdom- A tale of 4 Kingdoms.

JR Max Wheel

 

14 March 2017

 

The UK’s proposed exit from the EU has thrown up some serious fault lines inside the Union.  A core reason is a failure that goes back years, the infamous West Lothian question so eloquently described by its own MP. Tam Dalyell, whereby the devolved administrations MPs sitting in Westminster can vote on English matters, yet English MPs cannot vote on those arising in those administrations. The movement towards decentralised power in the UK was in principle fair enough- to move decision-taking closer to the people, but as with many important issues it was not thought through, thereby creating another anomaly in the quirky nature of the UK’s unwritten constitution.

 

Despite sitting for a Scottish seat- West Lothian, Dalyell opposed both plebiscites in 1979 (Callaghan Government) and in 1997(New Labour- Blair). He was right. Nonetheless New Labour pursued the devolution agenda in Scotland and Wales creating a Scottish Parliament and a Welsh Assembly. The tortured politics of N.Ireland was subject to a separate agreement. The critical failure was to confine the plebiscites to the constituent countries only and not open to English voters. This might be seen as a cynical ploy to entrench Labour votes in its traditional heartlands especially Scotland and Wales. In Scotland, all it has done is the reverse, encouraged a nationalist and separatist movement, based on actual and perceived historical grievances. The situation in Wales has not (yet) resulted in a similar upsurge in nationalist feeling. Had the devolution argument been aired properly it would have queried the relationship of all the constituent parts, not just the devolved regions.

 

Thus, rather than redefining the United Kingdom for the future, it has created confusion and mutual suspicion. A much better solution would have been to have redefined the role of the Upper Chamber, long a parking lot for the great and the good and a handy way of rewarding party political participation. Its role as a revising chamber is a valuable one, but it has become a bloated anachronism, with over 800 members. In addition, it contains bishops, law lords and hereditary peers. Why so many when the US can have an upper house of 100 in the Senate and other parliamentary democracies make do with many less than the UK. There have been endless attempts to re-legitimise the Upper Chamber by direct election, none has really succeeded.

 

What is needed is a Chamber that reflects the diverse interests of all the countries, and thus represents regional interests which cannot then be over-ridden by solely English interests, nor vice versa, this would force a level of real debate and concerted decisions. Needless to say this would provide a perfect opportunity to reform the Chamber and to rid the UK of its excess peers, and to concentrate their minds on issues of real importance.

 

This matter acquires an extra urgency as Scotland contemplates a second independence effort and whilst N. Ireland faces a very difficult problem arising from Brexit. It suits no one except those willing to frustrate the electorate’s result, of which there are plenty, with quite specific and anti-democratic views.

 

Media Lies and our growing inability to discriminate.

7 January 2017

 

JR Max Wheel

 

If you google the word “discrimination”, you will find pages of information on racial and social issues, you will not so easily find it in its primary sense of the “ability to see a distinction or differentiate”, or a further important sense is “observe distinctions carefully, to have good judgement”. Why does this matter, words change meaning constantly don’t they?  This is undeniably true but it obscures an insidious trend, one where precision is unimportant, sloppy writing is good and meaning is lost or manipulated in the interests of the writers’ agenda. The reader’s job is not merely to swallow the content, but to use their critical faculties to tease out bias, half-truths, and outright falsities.

 

This is hardly a new complaint. It is one however that has become more important since the age of 24 hour infotainment. Political words are especially subject to misuse.

Here is George Orwell writing in April 1946 in an essay on Politics and the English language:

“Language”, he writes, “is being used in an improper way, political words are being abused. The words, democracy, socialism, freedom, patriotic, realistic, justice, have each of them several different meanings, which cannot be reconciled with one another. Words like this are used in a consciously dishonest manner”. Examine any of current big issues; the election of Donald J. Trump, Brexit, climate change, there is plenty of evidence of descriptive manipulation, not to enlighten or inform, but to promote the writer’s view and usually to denigrate the opposition. How many swivel-eyed racist xenophobic loons does it take to change a light bulb? Discourse has degenerated to the trading of insults. This is perhaps unsurprising since so much of the writing is poor quality, careless and dashed off to meet a deadline. Also missing is a sense of balance, such that media stories are disproportionately skewed to the trivial, air-time is wasted on vacuous celebrity non-stories. Do you start to listen to who edits and produce BBC news or other media stories let alone who owns the media outlet? This is important. Here is Orwell again. “In our age, there is no keeping out of politics, all issues are political issues and politics itself is a mass of lies, evasions, folly, hatred and schizophrenia. When the general atmosphere is bad, language must suffer. But if thought corrupts language, language can also corrupt thought”. This is a killer observation. Language needs to be used as an instrument for expressing, not concealing, or preventing thought. One hesitates to imagine what Orwell would have thought of Twitter, but one can guess.

 

Whether we heed and act on Orwell’s advice is surely important, to be able to seek out cant and the agendas of the self-interested. Welcome to all-pervading “ Newspeak”.

A Collaborative Europe?

JR Max Wheel

4 August 2016

Open Europe, the think tank, today floated the EEA route as a potential transitional measure for the UK whilst the country clarifies its post membership aims. This is a position that was proposed by Dr. Richard North (and others) pre-referendum as being a logical route, but it is slow and ponderous and falls far short of the “take back control” leaver stance as:

  • UK contributions will continue
  • Free movement of people will continue
  • EU law making will largely be the same
  • Free trade agreements can be negotiated in principle but EU regulations inhibit necessary flexibility

It has the merits of avoiding a direct clash with the Scots and Northern Irish voters, but as with all transitional arrangements they begin to take hold as a new “status quo” and they most certainly do not reflect the leave vote ambitions.

Article 50 is however so badly drafted as to be a near unworkable part of the Lisbon Treaty, presumably because it was never envisaged that in reality any member state would wish to leave, so it is there almost for completeness sake. It is also extraordinarily one sided, with any negotiation being subject to the Council and Commission acting as judge and jury. No trade or international agreement would put its interlocutor member in the “dock” or make it jump through so many hoops. This much should be made clear in negotiations. The UK has indicated it would not trigger article 50 until 2017, this is a key year with both French and German elections looming and with considerable possibility for upset. Since both the EU Commission and many member states resent the implicit threat to the “European Project” by the UK vote, there is a rawness to the current debate which inhibits proper dialogue. And dialogue is needed if the process is to be both facilitated to the benefit of all parties and to establish the necessary post membership collaboration whether on matters of security, defence, scientific research or similar cross border issues.

The Project itself is threatened by some serious internal disconnections of which the currency is the most serious and the democratic gulf between citizens and the EU governance entities. As Yannis Varoufakis, the former Greek Finance Minister has argued, talking of an EU democratic deficit is comparable to arguing  of an oxygen deficit on the moon- there IS no oxygen on the moon!

This political deficiency is however only part of the problem, the EU has evolved since the 1950s, when many of its ideals and aspirations were relevant e.g., the 4 pillars or freedoms:  without amendment, movement of people and capital especially, now look to be frankly unworkable and not just for the UK.

At the core of the EU is the Franco-German axis. This was always rather cynically designed as a German cart with a French rider. This quid pro quo, rehabilitating the German people following the horrors of war is a power game, where French diplomacy would triumph as the German economy recovered via the economic miracle. Far from being the end of the nation state  subsumed into a more “equable“ supranational body, there have been a series of brutal trade-offs between both parties, made explicit following the reunification of Germany. 1989 should be seen as a seminal year and not only for the EU.

What were the parties’ objectives? There was a trade-off between an enhanced global role for France in exchange for the curtailment of the monetary discipline of the Bundesbank and an increasingly dominant German economy. The genesis of the single currency was a naive ploy to force political union via economic means and in swapping a stable DM for a inadequately structured new single currency and the establishment of a “non-German” dominated Central Bank, the ECB. Like many other “orthodoxies” this hit the buffers with the crash of 2008, but a short backward glance to the behaviour of the Exchange Rate Mechanism in the late 1980s/1990s would have shown how dangerous this experiment is. This error was compounded by the eastward expansion of the EU to include countries who naturally enough wished to share in Europe’s democracy and economic opportunity, but whose level of development was markedly backward thanks to years of Communist or autocratic misrule.

The EU still has not undertaken the proper political calculus as to why Britain voted out, as it is a confused and multifaceted issue. A major albeit not sufficient reason is the stalled economic prospects of the many and the inequalities engendered by policy failure and rapid change. Equally important is the real sense that decisions are taken remotely and without consideration of societal consequences- immigration being the obvious one. Add to that the malign effects of globalization, the rise and rise of a wealthy and disconnected elite which has created a truly toxic brew roundly rejected by a significant part of the electorate. Over focus on Remain/Leave campaigning positions is both misleading: neither side emerges with any credit, that however is to miss the point.

The EU needs an overhaul and a redesign if it is to ever properly engage its citizens and to prosper, the UK needs and wants a collaborative approach to its European neighbours, whichever route offers the greatest real benefit to both-this is the prize and one is not at the expense of the other.

 

 

 

Brexit – now Government and Opposition Chaos!

JR Max Wheel

30 June 2016

Today brings news of fresh turmoil in UK politics in both the Government and opposition ranks. Irrespective of the rights or wrongs of the UK case for leaving the EU it is blindingly clear that the country’s governance has been found wanting. Under more normal circumstances there would and should have been a vote of no confidence in the Government and a likely general election.

It is however symptomatic of deeper constitutional issues which have been festering since the Scottish referendum and the devolution settlements: it seems to me that this now requires wholesale changes to our voting system which is increasingly exposed as unrepresentative. It may be as well that the UK does not do “Government by plebiscite” normally, but this referendum has exposed deep fault lines, as well as abuse.

It should have escaped no one ‘s attentionthat since the campaign was carried out on a cross party basis, that any subsequent action should require a similar cross party arrangement and agreement to implement, not a prolongation of the status quo ante.

The UK’s first past the post system has generally served us well enough, this time it is in danger of embedding a very divisive decision through Parliamentary majority and in the near absence of a Prime Minister, a full-blown leadership campaign and with no effective opposition. Worse the leaders of both campaigns have been exposed as acting in self-interest and not necessarily in good faith. This is unworthy of any democracy, let alone the UK.

We now need comprehensive overhaul of the following and with some urgency.

  • A move to proportional representation for the House of Commons.
  • Reform and radical downsizing of the Upper House to function as a reforming chamber – a Senate. Removal of all peers, whether Lords Spiritual or Temporal
  • Direct representation for the devolved administrations in the Senate
  • Abolition of the much abused honours system
  • A charter of British Rights applicable to all citizens, and extensive to all legally, if temporarily residing in the UK.

 

We may still decide to exercise a sovereign right to execute a withdrawal from the EU, but it  should not be rammed through on the current basis. The leadership of the campaign has by its behaviour and the turmoil evident in the opposition, forfeited the right to proceed “as is” after the unseemly brawl of a leadership campaign being embedded in the process and in so doing distorting the result together with flagrant abuse of Government department resources. Two choices remain – neither of which should have ever been necessary, a rerun of the referendum or a general election when the opposition have a new leader and team in place.

No side emerges with any credit from this exercise which is worthy of a banana republic and not Britain. It’s time for serious change.

 

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