A changing world

In 1985 or so, I can remember a lesson at school where we were discussing what made a superpower. We decided that land area (or empire) and population, resources and technologies were important factors. At the time, the USSR as was and the USA as is were the two big superpowers and we then thought about who else we could add or who else could be a super power. Off course, talk turned to the continents. We said as eager pupils “China” as it had/has a big population and a big area, but our teacher laughed and said” Never. its isolated, communist and has no sphere of influence, no technology.” We talked of past empires and how they rose and fell, looking at Greece, Rome, British Empire. Nodding our heads at the certainty of decline.  Then the Berlin wall came down in 1989 after I left school and went to university. Russia went bankrupt, and the state owned things were sold , the oligarchs came. Europe expanded and became a wannabe superpower, and China developed into the second economic power in the world. Today we have certain superpowers, The USA, China, Russia, The European Union, India, and then those that will become superpowers, Brazil, African countries such as South Africa and Nigeria. Perhaps Africa will develop its own equivalent to the European Union and show us how it’s really done.

Europe has fallen. Its still a rich and important market, but growth is stagnant and we now spend our savings instead of saving money. Even worse, our countries all have big debts, which we will have to take responsibility for eventually, and as we are now spending our savings, we are declining in Europe. We have no glue to hold us together, no identity, language or culture that joins us, and so Europe will fall.

What will take its place? Northern African countries do have a similar language, identity, culture and tradition. Perhaps they will form a block of countries to make a trading zone. Perhaps a nucleus of European countries will remain tied together, or even merge to form one country. Perhaps. Today canditad Trump has told us its the end of globalization and the beginning of Americanization, a clear vision that tells us America will now nolonger have influence in the Middle East and will look to Fracking to produce its oil, meaning American Military spending will be cut and that those zones of tension will undergo turbulence followed by stability. America will look to import less and produce more of its own things, a clear shot over the bows of the Chinese economic model of production, meaning China now has to develop its internal market or , go to war in the South China Seas as a way of uniting the population . If America turns its back on Japan, as looks likely if Trump wins, then Japan will have to change its pacifist ideals.

But Trump’s declaration forgets that business look to make the best deals. Where labour is cheapest. Where taxes are lowest. And business is no longer “heavy industry” but cutting edge and technogy/service based. China can produce more steel per year than the rest of the top 20 world steel producers combined, ten times what America produces per year and 8 times what Europe produces per year. China can control the supply of steel, cloths, electronics, raw materials, (except Oil) and has a powerful position. China will look at what it needs and try to take these things, as in Tibet (Rare earths) and Afghanistan (Rare earths/drugs) and Taiwan. If America makes the things , it has to sell them at a profit, which means that labour will have to be cheaper , or that raw material prices drop, or that robots do a whole load of things, and so energy has to be cheap. Perhaps Trump has understood the future involves a whole lot more robotics and so less work for people.

 

 

The Road from Wigan Pier

Orwell wote in his book “The Road to Wigan Pier” about hardship and poverty, poor housing and hard jobs, your place in society and your expectations and visions of the future, how the working class , or at least the poor people who lived in the slum dwellings in  conditions of extreme hardhips weemed to be glad to have what little that had, as after that there was nothing. You might not have much, but you could , (as Pratchett noted), have standards. The second part of the book reads like a pamphlet .

He states that these conditions can’t continue (I agree, and they didn’t in the main post war)

He says that socialism is a solution infact THE solution to the problems. But he says that there are so many fruitcakes and weirdo’s, people who talk about the intricates ond mechanics rather tha the humanism that most people get fogged by the debate.

Common decency and fair shares was the basic objective. But he lightly forgets the role of time. Perhaps by providing the decent housing and  working conditions and health and eduation, the socialist government forgot that people take pride from their ability to provide and work. If you give people to much, they take it for granted and don’t maintain it, or even fight for it. Too many council houses became burn’t out estates. The doorstep so clean you could eat your dinner off it of my grandmothers Attercliff estate has been replaced by the platic bottles and burnt out sofas, the pizza box living rooms and bins rolling round in the kitchen. A personal view.

I’m not judging these people. Orwell points out that Northern people thought themselves the best, with the exception of the coal workers. He also notes the solidarity and communities, the middle class nblackleg aproach to stikes as this meant promotion, and the general sketch is probably flawed as it bounces on the path of stereotype. So even in the tightknight communities, outsiders were seen as different. Humans always look to put each other in a category. Class, and wealth, job and position.Country and creed, religion and race. “Them and us” rather than “we together”.

 

Orwell records the poverty he sees, and its a view of the shock of economic collapse and unemployment. The end of a society. Only ten years later, his view of a Socialist society came true, and perhaps the slums were almost completely cleared, Council housing was put in place by Conservative yes, Neville Chambelain  and Labour governments. Blocks of flats became the new slums, perhaps, and people forgot their pride when given things , at least in the long run. Good things came of this, the NHS and the welfare state, free education, nationalisation and so forth. But the years wore them down , as governments didn’t invest and finally sold them off in the 1980’s and henceforth.

Orwell notes the real power of coal, which has all but dissapeared in the years since. In 1920 over a million workers worked in the coal industry, in 1930 it was over 900 thousand. In the 40’s 750 thousand men. So we see a decline even before. As late as the 1960’s, 600 thousand workers worked , today, its 4 thousand workers. Before the strike of 1985 there wre 237 thousand workers, after in the 1990’s 49 thousand workers. Coal , and indeed many industrial jobs have declined or dissapeared. Shipping, steel, tin, many heavy and even light industries have gone to low cost countries. Only the industries that offer clear added value in terms of technology or quality remain. Of course, this isn’t entirely bad a smillions have come out of poverty in the developing world, and our economy has evolved to adapt to this.

It shows that socialism is a great idea , but when economics evolves, markets evolve and industry evolves it needs to adapt instead of which it becomes militant. The  road from Wigan Pier is this. The faiure of socialism to adapt, the birth and growth of neoliberalism, the privatisation of common assets, the movement of common wealth into private hands, the withering on the vine of education, health and other sercvices, arts, libraries, as we move towards the idea of price rather than that of cost.

We could say that all is  is inevitable. Globalisation moves jobs and money around. We could mourn the loss of comunities in the North of the UK as coal and steel and ship building dissapeared, or celebrate the fact that billions move out of povery in Asia. Companies look to save cash were they can. Eventually, everyone will earn the same wage. The flat world of Thomas Freidman. But this idea ignores the develpoment of idea, technology and the evolution of industries, just as socialism does.

Supply chain dynamics insits that no countries with highly integrated logistic chains can or even will consider war.The idea that our interconnected world somehow prevents war is shown to be fake with ll the wars around us. Oil, Opium poppies , influence, religion, dogma, all outweigh logistics.

Brexit seems to have thrown a brick through the holy stained window of all these ideas.

Perhaps now we’ll see the bug infested world of  wage slaves come to pass.Or perhaps something else. The road from Wigan Pier certainly will be an interesting on.

History show us, before socialism, we have to endure fascism.

 

Brexit

Brexit. Its a disaster but we have to roll up our sleeves now! After an own goal, you have to try to score again!
We’ve left the EU (or have we?), so lots of things willl happen now. Love him or not, Cameron has stepped down and will hand over to a new pair of hands. He nearly cried at the end!  There will probably be a vote of “no confidence” organised in the HOP organised by Labour.( certainly!  ) with a 14 seat majority, the next PM will have one hell of a job. Its a bigger shambles now than after Mr Brown( God I hope I’m wrong). Everything looked to be going so well, unemployment coming down after a big recession, austerity winding down…. It’s 1979 all over again.
BOE just pumped 250 BN into the economy in the last HOUR (after ECB pumping 800 BN euros per month every month for the last year into european economies= 1 trillion!)
The HOP will probably vote to ask the PM not to enact article 50 of the TOL. But he’s duty bound to do so. However it will be the NEXT PM ( a she perhaps!) who does all this , in 2017 after the election of  a new leader for the Conservatives. So nothing really changes till 2017
Then Either A) the HOP has a vote on article 50 and it goes to the Lords and back again (3 years!). An online petiton to have a second referendum is currently underway and should this reach 100k people the HOP are duty bound to discuss this and currently 58k people  are signed up, 1000 per hour. So this looks probable, but who knows.
B) The new PM decides its his/her perogative as outlined in the TOL and enacts article 50 and we negotiate our way out.( or we don’t, and its a big big mess)
C) What usually happens in Europe: we vote again till we get the “Right result for Europe” whatever than means ( stay is what Europe wants, or does it?) à la Ireland!
Or D none of the above, and we end up with WTO tarifs emposed and we go from there.( and the Best of British Luck)
BOE slash rates by 0.5 % now and 0.25% after, taking us to negative interest rates and helicopter money
A recession is almost certain now. And not just for the UK, but for Europe too.
Mid term Scotland and NI leave, we lose our seat on the security council of the UN, we leave (or are asked to leave) NATO, if Labour win the vote of no confidence then Jeremy Corbyn will be the next PM (or there will be a GE anyway, I’m not sure he’ll win that, but who knows) should he win Trident goes, and we definately leave the EU as he’s anti EU, if Boris or Gove win then goodbye NHS and free education, and we leave the EU too. So damned if you do, damned if you dont.
Other countries will look and see, perhaps others will leave. We’ll join with Norway, Denmark, Sweden, Iceland , perhaps the Netherlands and Finland /some others  to make some kind of Northern European Market Zone, as before the EU. Or be like Norway, half in and half out. We go from 6th biggest economy to the 16th to the 60th. in two decades.
Europe won’t be very friendly to us for a while. France  (well some french politicians) will sharpen their knives, and the other 27 countries will probably put the boot in. We have to persuade 20 of the 28 of our trade and currency, tax and other ideas within 2 years. We we’ll never be let back in, even if we are eating potatoes and starving, nor will we be allowed to emmigrate from the UK into the EU. Ex pats will be forced back to their countries of origin. Unless they take the nationality of the country they live in.
Europe was an attempt to get  rid of  nationalism but in the end “the bloke down the pub” won. Ironic that Boris Johnson, whose hero is Churchill, Bankrupts the country just as Churchill did with gold standard!
Marine Le Pen will win the Presidency and  Donald Trump in the USA. Extremes from left and right will come to pass in Europe.
Currencies will crash, as in the 1920 into a maelstrom of bitterness, poverty, unemployement and insecurity, which extremes will promise to resolve as in the 1930’s and all this leads inevitably to war. The Euro is history, perhaps the pound will hang on…. we’ll probably either go back to old currencies or stricter fiscal and financial intergration…..
Its the end of the UK, the flag will change, the end of the EU, their flag will change. Europe wasn’t perfect and really needed urgent change, which will now have to come.( how ironic!) We’ll see European taxes and laws come into place, and a closer unification, or completely the opposite, a dissolution of Europe. The opportunity for others to leave will be taken away, and Europe will become a much more central (and even less democratic) place, or they’ll all decide it ‘s the end of the party and to go home and sleep it off.
Putin will be grinning from ear to ear and will then ensure those borders Stalin enjoyed are re established all the way to Poland. OR BERLIN. Trump likes Putin, so don’t expect any favours from the USA. Or the EU.
France will be panicking now! If the EU breaks up, they’ll almost certainly have to default and they won’t be the only country in the ex EU zone to do so, ( everyone except Germany is in the mess) and the euro will be ” a broken dream”.
Prepare for war. We seriousy discussed going to New Zealand. If Le Pen Wins, We leave France. No way can we stay.
Of course, perhaps this is the doom scenario and I need to “think positive”
I remember my parent’s generation, the “Colonels from Tonbridge Wells” muttering into their moustaches at dinner parties thirty years ago  in my parents living room  about giving up our colonies, how those “backwards heathen places” would never make it by themselves, but they (in the main ) did. Look at India!.(Well and Zimbabwe too, not so good there…)At the time, as a radical 15 year old, I thought “what nonsense!” So I’ve shaved the moustache, and put down the sherry, hung up the baton and come back from parade.
We’ll continue, as we always have. But it will be a different place when we go back to visit (IF we go back) or If we are FORCED back. Any way, ironic to find our country in the same position as the colonies all those years ago.
We’ll probably end up as Belgium , a small country with no influence and who no one cares about. English as a language starts its decline here, and the world now becomes a different place. Europe has lost its influence, and we look to Asia to carry on.(with south america/africa). That’s been the case for 20 years though. We just didn’t get it!
Its the End! Its the beginning.

Thoughts on Europe

Europe is at the edge of reason now, reaching forward for should be hoped whilst struggling not to fall into the abyss.

Europe was a great idea, and is worth fighting for, but it needs radical change to survive and it lack the political will and intelligence to do so.

At the moment Europe faces many fronts.

Economic decline, as Asia rises. In the 80’s, 70% of trade was European , now its 30% of world trade.

The rise of national identity, as the extreme right springs up in many countries. Not just that but the extreme left too. Indeed the mainstream has lost its potenty and has failed to answer the urgent poitical issues, or at least the electorate have been told that.

Immigration. Europe’s poster boy free movement ideals just wash up on the shores as people drown in dodgy boats trying to get here. The Syrian conflict has shown Europe as unable to deal with urgent matters and the Geopolitical power of Russia.

Dissolution. Brexit/Grexit threaten now. Even the fact of the brexit referendum means Europe isn’t thinking about the issues or values, but that their eyes are elsewhere.

Invasion. Russia looked and took Ukarane and will look at the Baltic states of Latvia, Lithuania and Estonia. Nato stood and watched Ukarane and before Georgia and even Cyprus had to be careful. So a not so sleeping bear to deal with.

We need an elected European president, with a European army , navy and airforce. Nato isnt fit for purpose and America isn’t able to prevent collapse. We’ve pumped 800 billion dollars into the economy every month and now look seriously at helicopter money, or cashless society ideas. So we need a new central bank, with central taxes and laws.

If we cant accept this, then it is the END of Europe and all its cronism and gravy train eurocrocy, laws for human rights and employment, protection and prevention.

We don’t need a new empire, we have just got over the last one.

 

Defending Greece

Defending Greece

A lot of financial spectators say that Greece shouldn’t have been allowed to join the Euro, but that is true for many Countries ; in any case, they had no choice as part of the European Union’s requirements is that countries ultimately join the Euro unless, like Sweden and the UK, they have an opt out clause. Iceland came back from the dead, perhaps Greece can. Also one could state that even if the figures Greece gave were dodgy, however the Eurozone should have done their job better and investigated the figures correctly.

And then we have to deal with what is, now what shouldn’t have been.

Greece doesn’t have the money to pay back the loans; its big industries are tourism and boats. Boat builders are exempt from tax under the Greek constitution, and if you tax the tourists they choose cheaper destinations such as Croatia. Greek hasn’t got many natural resources such as oil or diamonds to sell. You could argue that they should make more use of geothermal or solar. It needs investment, and they are bust.

However, if we consider Japan, their debt to GDP ratio isn’t exactly reassuring and one wonders why Greece g=has become the whipping boy scapegoat for Northern rich countries who think themselves better because they are richer; The reality is that if asked to do so, NO European country could pay off their debt straight away. Name me a country with no sovereign debt!

Greece will vote in a referendum to accept or not the terms from Europe on Sunday. But many want to stay in the EU. Greece probably needs to default and reform outside the Euro to rejoin at a later date, or do a Cyprus. Indeed, Greece asked for a 3rd bailout only hours ago. The EU parliament would have to agree to that, as well as the German one, so probably “no”. This is when countries put their own needs before that of Europe and its true of both sides; Europe needs stability, and the debt crisis in many European countries (Iceland, Ireland) was caused by bankers buying dodgy debt. But in Greece, the debt’s been there for a while.

Only Spain have defaulted more on debt (http://www.cnbc.com/id/47814564)  in all the other European countries. Only Ecuador and Honduras have a worse record of meeting their debts. – (http://www.historytoday.com/matthew-lynn/greek-economics-drachmas-debt-and-dionysius#sthash.qNJZh7JJ.dpuf)

This underlines the whole problem of the Euro. The dollar is backed against oil, the pound sterling was backed against coal and the empire. The Euro has no backing other than collectivity. If we start to see this disappear, the Euro will follow the same path. The EU needs a sound fiscal policy and not just a joint currency; It needs joint taxes and social care, the same throughout the EU.

Greece needs to reform its constitution and ensure that the tax revenue it needs is forthcoming as well as reforming its social systems. Indeed Europe needs to create a social and financial model for all its countries, which works in all economies.

Germany’s posturing and figure pointing forgets that great economies become poor ones very quickly. Their refusal to aid Greece is as financially unaware as Greece’s debt. Maybe they didn’t want Greece in, but they have a duty to bail them out now they are.