Monthly Archives: December 2010

“…since records began in 1659″

The year 1659 appears with remarkable frequency in the media in 
connection with the English climate, often in the form “since records 
began in 1659”. It is a statement  rarely if every questioned by 
anyone with access to the mainstream media. 

Just pause and think about that claim. Does it seem probable that 
official weather records have been meticulously kept for three and a 
half centuries, kept before the scientific and industrial revolutions, 
kept before the English or British state became a bureaucratic monster? 
The answer of course is that it is extremely improbable  and did not 
happen. What did happen in the third quarter of the last century is that 
a British meteorologist by the name of  Gordon Manley attempted to 
produce an historical series  for temperature in England which he 
eventually extended to 1659. His work over a quarter of a century is 
summarised in two papers published by the Royal Meteorological Society: 
The mean temperature of central England 1698-1952 (1953) and Central 
England temperatures – monthly means 1959-1973 (1974) The two papers 
can be found at  http://www.rmets.org/publication/classics/cp1.php Other 
academics have built on his work since. 

Manley, like a good academic, was scrupulous in admitting the 
difficulties in constructing such an historical series: “Methods of 
approximation must be resorted to [when constructing any historical 
series],  most notably in England where, despite our very long 
scientific tradition, almost all observation before 1841  was dependant 
on amateur effort so that widely scattered records of diverse length and 
accuracy provide endless problems… The English records offer a 
formidable problem”. The opening paragraph of  his 1953 paper. 

“Formidable problem” is understating matters. Even readings of 
temperature today using highly sophisticated equipment  cause 
considerable dispute because where the measurement is taken is all 
important, for example,  readings taken in or close to urban  areas will 
produce a higher temperature than ones taken in areas with little or no 
human habitation. Trying to get a consistent environment to take 
temperature over a long period of time is obviously difficult and 
comparisons with the past questionable because we can never know what 
the conditions were exactly at any point in the past.  Hence, even with 
the advent of official records early in Victoria’s reign it is not 
simply a question of comparing data from one time with another. For 
example, has can temperatures in London today be meaningfully compared 
with those of 150 years ago when there were no motorised vehicles and 
coal was the main energy source? 

Once Manley enters the period before the official records (pre 1841) his 
caveats  become ever more severe, whether it be the paucity of the data, 
breaks in the data, the widely different means used to collect data, the 
absence of any information about how data was collected and even the 
switch between the Julian to the Gregorian calendar in 1752 which means 
every record prior to the change has to be recalibrated to the 
Gregorian. 

Manley’s research and analysis was honest but the most rational thing 
to conclude from it is that it proved no meaningful  historical 
temperature series  for England could be constructed over the period. 
Yet his research is trotted out as having the status of certain fact by 
the mainstream media, politicians and, to their shame, often  by 
scientists when they enter the realm of public debate.

How the market fails to provide what the customer wants

 There is no better modern example of the market failing to provide what the customer both needs and wants than the computer industry. If it was driven by the customer, the computer industry would produce hardware and software which was easy to install,  had continuity of use, was simple to use and was supported by adequate help lines and manuals. The industry signally fails to do any of these things.

Hardware and software are of course purchased in ever greater volume and computer services, including maintenance, continue to swell.  But that is not an indication of customer satisfaction. Rather, it is simply a reflection of how computers have become an inescapable part of our lives, not only as obvious computers but also in the guise of so many of the other machines we use – everything from phones to intelligent clothes. Business and public administration have become so dependent on their use that they cannot do without them. That being so, whatever is on offer, however unsatisfactory, is bought out of sheer necessity.  The computer companies have the modern world over a barrel.

It might be objected that although most people cannot completely escape computers at their work, they do not have to bring them into their private lives. Yet increasing numbers buy computers for private use.

Why do they do that if the machines are so unreliable and demanding? Simple: once a significant minority have private computers and business uses them very widely, it becomes very difficult for the rest to resist, not least because businesses and government increasingly require those dealing with them to do so by computer.  But there are other pressures as well.

We have long passed the point where a handwritten document is  likely to be read by most people in business unless it involves an order or payment. Now, except between social contacts, everything must be wordprocessed to be acceptable.  A word processor or access to one has become a sine qua non  for anyone who wishes to be taken seriously.  Even amongst private individuals a letter is increasingly seen as unusual or even quaint.

With emails, we have not come to the stage that telephone ownership reached  a quarter of a century ago when not to have a phone became considered eccentric, but we are rapidly moving towards it.

Employers increasingly wish to contact employees by email wherever they are and this means the choice is often between having a computer and email at home or not having a job.

Those with school age children, whatever they think of computers, find it next to impossible to deny their children not only a computer but access to the internet, both because the children want it to match their peers and because they have been brainwashed into believing that a computer is a necessary educational tool.

In short, people are increasingly being driven to become computer owners  and users  not because they actively want to,  but because they feel isolated and excluded if they remain computerless. Again, aswith the analogy between telephones and emails, within the foreseeable future,  someone without a computer is in danger of becoming in the eyes of the majority as much as an oddity as someone without a TV is now considered.

Is society materially enriched by “free markets” and “free trade?

This is an impossible question to answer categorically because there is no way knowing what would have happened if protectionism had remained full blooded throughout the last century and a half. One can compare growth rates under stronger or looser protection regimes,  but they really  say little  because the other determining factors such as public expenditure have varied so greatly.  These variables also blur judgement about the comparative merits of controlled and “free” domestic markets.

 The most certain thing one can say from the economic experience of the developed world is that governments running commercial industries such as coal and steel directly is generally a mistake. (Governments are the natural suppliers of universal services such as healthcare only because private provision of such things is never adequate.)

What is certain is the fact that the material effects of “free trade” are far from uniform. It is no consolation to those who suffer along the way that others may benefit from their disadvantage. The next generation or the generation after that may be richer but why should their benefit be brought at the cost of disadvantaging  a prior generation?  Certainly no politician or political party standing at an election would dare to do so on a platform of “we shall make many of you poorer to make future generations richer.” Those living at anypoint in time have their own moral context and needs.

The constant economic turmoil caused by “free trade” and its inevitable concomitant,  the supranational corporation,  undeniably leads to circumstances  which greatly disadvantage large swathes  of  the opulation in the First World through the removal of First World jobs to the rest of the world. At worst, these people become the perpetual victims of structural unemployment (try getting a job in an area where the main employer closes and you have no scarce or easily transferable skills or you are middle-aged or, indeed, try opening a new business or becoming self-employed in a depressed economy): at best they are diven into ill-paid and uncertain employment.

 What is meant by material enrichment? Britain as a case study 

The assumption is that the material conditions for most have improved considerably over the past two hundred years. Any economics textbook will plot economic improvement in terms of rising real  wages. But those supposedly  rising real wages are based on measures which are often  questionable, incomplete or derived from very narrow  data such as corn prices.  Even modern measures such as the Retail Price Index (RPI) are not static,  their content and weighting being regularly revised. Nor do such measures fully represent the true costs of necessities, the most notable distortion in Britain being the failure of the Retail Price Index (and its successor index the Consumer Price Index) to reflect housing costs fully.  Any comparison between different times based on such measures needs to be treated with caution.

Of course no one in their right sense would question whether there has been massive  material advance in the past two centuries.  A more interesting question in our context is  whether most people are materially better off now than they were in 1960s,  by which time  a fully fledged welfare state was bedded in, housing, both owned and rented, was reasonably priced, social housing was being built in assive quantities, university education was not merely free but students subsidized with grants, unemployment was tiny and inflation low.

Today  the welfare state is constantly under attack by the British political elite and in some areas such as NHS dentistry already seriously inadequate, while the state pension is much reduced as  a fraction of the average wage following two decades of increases linked to the  cost-of-living pegging rather than increases linked to the average national wage. Housing of all sorts in most parts of the country is presently absurdly  costly and social housing is greatly reduced  through Right-To-Buy and minimal new building since the 1980s. The cost of university education is rocketing and grants are a distant memory.

Unemployment remains high today (2005) even by the official figures – approximately 950,000 by the claimant count and around 1.5 million by the most widely used international measure -  figures which  most probably  severely understate the real unemployment level because it ignores the considerable disguised unemployment within the 2 to 3 million people currently on long term sick benefit payments (the 1980 figure for such people was 600,000). The increase in those staying on at school after the age of 16 and going on to university has also reduced the present figures by taking hundreds of thousands out of the jobs market for years.  From 1945 to the late seventies unemployment never rose above a million on the official claimant count and for most of the time was considerably lower even with little  disguised unemployment and far fewer people staying in education after the school-leaving age (which was only 15 until the mid sixties).

There  are other fundamental social changes which bear upon the material state of the nation.  Many more people today have to travel long distances to work than they did forty or fifty years ago.  That is costly both in terms of fares and time.  More generally, it is increasingly difficult for someone on the average wage to support a family on that wage. That often means both parents have to work not from choice but necessity.

 Taxation bears much more heavily on the poorer part of the population now than it did in the past.  Direct taxation – income tax, national insurance, inheritance duty – applies to many more people now than it did in 1960,  primarily because a failure to maintain  personal allowances and tax bands at a reasonable level. Direct taxation is also broader in scope, for example VAT compared to purchase tax.  Such taxation takes proportionately more of the income of the poor than the rich.

It is a moot point whether overall people are generally materially better off than they in 1960. They may own more trinkets such as TVs and computers and some imported goods such as clothes may be at least much cheaper, but those are small advantages to set against the great increase in housing costs and commuting fares and the diminishment in social provision. Doubtless a section of society has benefited, but it would be a brave man who wanted to argue that the condition of the vast majority has improved, especially the poorest third of the population.

Many will  read this with astonishment, saying but we have so much more today, dazzled as they are by the many new  products. It is important not to confuse technological advance with “free markets” and “free trade” or general material wellbeing. People are undoubtedly better off in 2005 in terms of being able to purchase such things as cars or electronic goods then they were in 1960.  But people in 1975 were also better off in those respects than those who had lived fifteen years before. That improvement  was long before “free markets” and “free trade” had become the elite ideology.  It is worth adding that  new products often result in additional expenditure regardless of whether the individual really wants the product – any product which becomes widely used is difficult to resist. Technological innovations are particularly prone to induce reluctant purchases.

If weather persists it becomes the climate

Letter published  in Sunday Telegraph 26 December 2010

  
Sir,
 
The advocates of man-made global warming meet any meteorological event such as the recent severe winters we have experienced   which does not fit into their ideology by chanting one of their favourite mantras ” weather should not be confused with climate”. The problem for warmists is that when weather lasts for years it becomes the climate.
 
Flows between decades of  warmer and colder climate in Britain are the norm. The decades leading up to the 1940s were unusually warm; those from the mid-1940s to the mid 1970s unusually cold. The odds are that we are now reverting to a colder period.
 
The warmists might care to ask themselves why the period 1945-1975 was unusually cold, when massive increases in man-made greenhouse gases took place during both that period and the warmer decades before 1945.  
 
Yours sincerely,
 
 
Robert Henderson  

Does “free trade” deliver greater prosperity? The lessons of economic history

Free traders base their case primarily on the increase in prosperity which they believe will only come through increased global trade. The general answer to that claim is that Man does not live by bread alone. Moreover, even if there is a general rise in the global product at present, it does not necessarily follow that the same or better result could not be achieved by other means.  The experience of all industrialised countries to date is that industrialisation is best achieved – perhaps can only be achieved by protecting the national economy. Indeed, there is a powerful logic in the idea that developing nations today require protection more than the early industrialising states  because  the early industrialising  nations  had  little competition.

But even if it could be shown indubitably that the global product is increased more by “free trade” than by protection, it does not follow that it is in a particular country’s interest to adopt free trade. Consider the position in a national market which operates “free trade” within that market, but protects its trade and industry from foreign competition. Companies go bust if they do not compete. But successful companies take their place and continue to provide employment at broadly similar rates of pay. The logic of global “free trade” is that countries which cannot compete will go bust and not be replaced by others in the domestic market. There will be no replacement jobs within the bankrupt country because the successful competitor is abroad.

The most lethal ammunition to discharge at “free traders” is the fact that no country in the history of the world has industrialised successfully without very strong protectionist measures being in place. That includes the first industrial nation, Britain, which spent a couple of cosy centuries behind the Navigation Acts, the first of which was passed in 1651, before becoming a free trader. Not only that, but Britain only adopted “free trade” principles after she had become heavily industrialised and did so at a time when the country was still the dominant industrial power in the world by a long chalk and her exports were more or less guaranteed to sell in foreign markets.

Before Britain dropped her old colonial protectionist system in the mid 19th Century,  she had industrialised in the modern sense from scratch and expanded her GDP massively. Perhaps most impressively she had managed to continue to largely feed herself without the price of corn going sky high, despite the fact that the UK population almost doubled between 1801 (the first Census) and the repeal of the Corn Laws in 1846.

As described above, Britain’s experience during her most committed “free trading” period was one of declining market share and commercial and industrial dominance while rigid protectionists such as Germany and the USA experienced massive growth. Of course, Britain could not hope to remain so dominant but her decline was remarkably rapid.  In 1870 Britain was the richest country by GDP in the world: by 1914 both Germany and the USA  had larger GDPs.  Moreover, by religiously adopting open markets, for capital as well as goods and services, Britain seriously distorted her economy. Vast capital exports resulted in underinvestment in Britain and foreigners manufacturers and traders took full advantage of Britain’s open doors. The result was that  by the

Great War in 1914 her farmers were on their knees and  modern industries such as the chemical and  pharmaceutical were  sadly undeveloped because of foreign competition (this distortion of the economy was soon to be a great national embarrassment during wartime when  many industries were found to be inadequate to replace imported goods).

Here is a German voice from 1913: “By its free trade policy England has been more useful to us than its numerous political machinations have been harmful to us. Where would our sugar industry – one of the first items to help us in our economical rise – have been today, or our textile and iron industries, had it not been for the free markets of England? Nowhere: we should have been entirely without our new German capital, our financial resources. On the back of free tradeEngland we  grasped  at  and  secured  our economical world-power….Industrial and political supremacy go together. Warships are machines, and the nation which succeeds in attracting the  centre of capital is the nation that can afford to build most. The present rulers of England represent the fourth generation of dictators to the world. It will not be easy for them to give up the role of ‘primus inter pares’”. (Prof von Schulze-Gaevernitz quoted – p347 -in The fall of protection 1840-50 by Bernard Holland)

Britain limped on with “free trade” after the Great War until 1931 when the secular religion was abjured, at least temporarily, during the Great Depression. Although unemployment remained high by historical British standards until WW2, the British economy behind protectionist barriers recovered quickly compared with most of the rest of the world. Most interestingly, the newer high-tec industries such as the motor, chemical and electrical recovered and grew fastest following their protection.

From 1945 to the mid eighties of the last century at least,  Britain continued in an essentially protectionist system, as did the rest of the world. The world economy grew strongly during the period despite the protection.  Even within the EU the “free market” mania did not really get under way until the Single European Act of 1985.

It is true that since protectionist barriers have come down over the past 20 years economic growth has been strong in the First World, but then it has been strong behind protectionist barriers  and, indeed, with state direction of the domestic market. Germany under Hitler in the 1930s recovered amazingly quickly, despite the fact that the Nazis pursued an economic course which was probably as close to autarky as it is possible for a major modern state to bear. Imports and exports were regulated according to what was perceived to be necessary to make Germany strong through self-sufficiency. What Hitler did not do was attempt to run industry directly. Instead, the Nazis allowed private enterprise to run commerce and industry whilst directing what was produced and supplied.

All of that tells us three things: that “free trade” is not necessary for rapid economic growth, that state regulation of the domestic market and international trade is not a recipe for disaster and that being a “free trader” when the rest of the world is not reciprocating is a mug’s game.

The Wealth and Poverty of Nations – David Landes

Published by Little, Brown and Co 1998 650 pages)

As my old history master never tired of saying, Wealth Is  Power! That is the reason why the cause of  nations becoming rich or staying poor is so fundamental a  political and social question.  It is also an infinitely  intriguing  subject, being  in principle beyond a  definitive answer  because any ascription of importance to any quality or event  judged relevant to the matter is by its nature subjective.  However, objectively  unanswerable as it may be,  it is  important to continue to address the subject because it has become a central part of  the ideological battleground  between the First World and the Third World, East and West,  Left and Right.  

 To this ideological battle David Landes brings an antidote to the anti-western forces which are so strongly entrenched in  the Third World and amongst the elites and ethnic minorities  of the First World. Driven by a deep knowledge of the subject,  he refuses to take uncritically  the “right-on” party line on colonialism, slavery and, indeed, the causes of  national wealth.  In fact, this book is an abattoir for  sacred cows dear to the progressive mind. As Mr Landes  is an American academic, this is a particularly brave stance to adopt  in the hysterical atmosphere of the typical modern US campus. On that count alone he is to be congratulated.

Two themes dominate Mr Landes’ thinking. The first and lesser is  the colonial experience,  particularly of  European  colonialism, since the fifteenth century: the second is industrialisation.

Mr Landes dismisses the claim that colonialism was the primary cause of the wealth of European powers or their  cultural offshoots such as the United States, by pointing to inconvenient  facts such as the experience of Spain, the greatest power in Europe between 1500 and 1650, and Portugal. Despite the immense wealth generated by their American  possessions, as societies they remained poor even during their period of greatest material gain from the Americas. Nor did their rulers achieve financial respectability – the  Spanish Crown managed to go bankrupt in 1557, 1575 and 1597.

As for the slave trade, one may point to the wealth  of  Britain at the time of abolition and in the century which followed. In 1807 Britain’s GNP was approximately 200 million pounds. By 1914 in was over 2 billion pounds. (Prices in 1807 and 1914 were approximately the same as far as these things can ever be judged) At most, Mr Landes  allows that the wealth received by Britain from the slave trade, India and the Americas may, but only may,  have slightly accelerated the first Industrial Revolution.

 The Industrial Revolution drives the book. For Mr Landes,  the question of the wealth or poverty of nations  only becomes  important  after the onset of industrialisation:

“The industrial revolution made some countries  richer,  others  (relatively) poorer;  or more accurately,  some  countries made an industrial revolution and became rich; and  others did not and stayed poor.” (page 231 ) Prior to industrialisation, the disparity in wealth between states, regions and even  continents  was relatively small.  Come the  Industrial  Revolution and massive disparities begin to appear. For Mr  Landes, it is to the success or otherwise in industrialising which is the primary cause of present disparities in national wealth.

 Mr Landes’ general interpretation treads a well worn path.  He views the historical process of industrialisation as twofold. First, comes  a pre-industrial preparatory period  in which irrationality of thought is gradually replaced by scientific  method  and what he calls  “autonomy  of  intellectual inquiry” (page 239) , that is, thought divorced from unquestioned  reliance  on  authority,  irrationality, especially superstition.  At the same time technology begins to be   something more than by- guess-and-by-God. This gives birth to  industrialisation by creating both the intellectual climate  and  the  acquired  knowledge,  both  scientific  and  technological,  necessary  for the  transformation  from  traditional to modern society.

Those are the bare bones of Mr Landes’ argument. He backs it with considerable detail.  All the usual suspects for the causes  of the  Industrial Revolution are paraded  and examined: technological, intellectual, cultural,  social, political, legal, economic, natural resources and climate.  Mr Landes gives greatest weight to intangibles such as intellectual  development,  political  maturity,  legally enforced respect for private property and a sound system of   money and credit.

One of the great strengths of the book is Mr Landes’ refreshing determination to pay attention to what actually occurs rather than what theory says should happen. Thus he goes against the economic fashion of the age and  questions  that  shibboleth of classical and neoclassical economics,  comparative advantage,  the idea that countries  should manufacture what they are most suited to in the circumstances of the international market. Mr Landes cites the instance of the Englishman John Borrow, who in 1840 urged the states of the German Zollverin to concentrate on growing wheat, and sell it to buy British manufactures and comments: “This was a sublime example of economic good sense: but Germany would  have  been  the  poorer for  it.  Today’s  comparative advantage…may not be tomorrow’s.”  

At a time when casual and gratuitous public insult of the  English is commonplace, the book is a salutary reminder of how disproportionate an influence this country has had on  the world. Two of the chapter headings will give a flavour of  this: “Britain and the others” and “Pursuit of Albion”. In the latter Mr Landes is emphatic on England’s importance:

 “The Industrial Revolution in England changed the world and  the relations of nations and states to one another…The world was now divided between one front-runner and a highly  diverse array of pursuers. It took the quickest of the  European “follower countries” something more than a century to  catch  up”.  (page 168). In other  words,  without  England  industrialisation would have been at best greatly delayed and  at worst have never occurred. (To that immense influence, may be added the Empire, the founding of the United States by  involuntary  proxy,  the development  of  parliamentary  government, the international success of the English language   and the individual likes of Newton, Locke and Darwin.)

Mr Landes also gives the modish lie to the idea that  Englishness is a weak or non existent plant. When examining the reasons for the first Industrial revolution occurring in these Islands, Mr Landes (he refers to Britain but it is  clear from the context that he means England) lists among the prime causes precocious English nationhood viz: “To begin with, Britain had the early advantage of being a nation. By that I mean not simply the realm of a ruler, not simply a   state or political entity, but a self-conscious, self-aware unit characterised by common identity and loyalty and by equality of civil status…Britain, moreover, was not just any nation. This was a precociously modern, industrial  nation.” Page 201).  

Before English readers get too bigheaded, it should be added that Dr Landes is distinctly critical of Britain’s failure to maintain the momentum of their initial industrialisation and  cites as dreadful warnings to others such failures as  Britain’s inability  to keep the lead in the chemical   industry in the nineteenth century and the dismal story of our car industry since 1945.

There is one part of the book which the reader should treat with caution. Mr Landes spends the first two chapters lending  rather uncritical  credence to the  distinctly contentious idea, much favoured by the Left and the Third  World,  that Europe was above all of the world especially   favoured  by  climate  and  natural  resources,  while  sub-Saharan Africa was especially disadvantaged by Nature.

 However, even here he redeems himself by refusing  to make this a prime cause of differences in national wealth. At best, in Mr Landes’ eyes,  natural advantages are necessary  but not sufficient conditions for industrial progress.

In the end David Landes, like every historian, economist and sociologist before him who has considered the subject, of necessity fails to provide an absolute explanation for the phenomenon of the wealth of nations.  What he has achieved  is a work of very considerable scholarship, which describes  and  analyses  the  multifarious  possible  causes  of disparities in national material success as comprehensively  and intelligently as any work the reader is likely to put their hands on.

Readers afraid that economic history is dry stuff should put their fears behind them. David Landes has an easy literary style and litters his text agreeably with anecdotes and surprising  facts in the manner of  Fernand  Braudel’s  Capitalism and Civilisation.

Do we really want to live forever?

Research into ageing is progressing to the point where a substantial increase in  the human lifespan may become reality within a generation or two. In November 2010  Ian Sample of the Guardian reported   http://www.guardian.co.uk/science/2010/nov/28/scientists-reverse-ageing-mice-humans#history-link-box   ) on research at the John Hopkins University of Baltimore which has rejuvenated  mice

“What we saw in these animals was not a slowing down or stabilisation of the ageing process. We saw a dramatic reversal – and that was unexpected,” said Ronald DePinho, who led the study, which was published in the journal Nature.

The question which humans need to consider seriously now rather than later are  the effects , both on the individual and on society at large, of substantially increased lifespan.

Greatly increased human lifespans are potentially profoundly dangerous because they will detach humans from the lifespan evolution has prepared them for.  it is a mistake to imagine that few people live to be old until recently, the very low average life expectancies in the past and the third world today were and are primarily due to infant deaths before the age of 5 with very heavy mortality in the first year.  If you got past 5 you had a good chance of reaching adulthood and if you reached adulthood a sporting chance of living  beyond 6o, with significant numbers living into what even today we would consider extreme old age.  In short,. There have always been people living to the outer limits of the natural human  life span so that any substantial increase in longevity will mean entering into virgin territory. 

The greatest fully-authenticated age to which any human has lived is 122 years 164 days by Madam Jeanne Louise Calment of France. She was born on February 21, 1875 and died on August 4, 1997. However, few humans have ever got past 110. More and more people are living to be 100 in the developed world but the vast majority of those die not long after reaching their century.  The average  lifespan of those not struck down early by illness, accident or  violence is  probably between 80-90. 

Suppose  humans begin to live until the average lifespan is  160, about double the average of those living in developed countries now.  That will mean some will probably live to 200+.  Few would welcome a century or more of extreme old age with all its natural physical privations.  But suppose  that scientific advances slowed the ageing process to half it is now , with a man of 80 being the equivalent physically of a man of 40 today.  Surely that would remove the obstacle to enjoying twice our current lifespan?  It would probably not do so.

The person might be physically the same at 80 as they were previously at 40,  but the psychological and sociological place they would be in would be completely different. Imagine having to live with the same partner for 120 years or more. Think of having to deal with your siblings for  a century and a half.  Consider the prospect of having to occupy yourself, with work or otherwise, for 120—140 years, with many decades of waiting for advancement.   Some would  adjust to it, but I doubt whether most would be able to beat off ennui . In this context it is worth thinking of the large number of people, mainly men, who die early in their retirement.

Of course, in all probability expanded life expectancy would not mean a life where the ageing process had been  slowed proportionately to the increase in lifespan, but even if  it  had been, an  average lifespan of  160 would mean  twice as long suffering the physical and mental inhibitions of old age.  Nor is it probable that all illnesses could be prevented or cured or damage caused by accidents or wilful violence repaired to restore the damaged individual to full health and capability. Imagine suffering from arthritis not for twenty years but forty years or having to care for someone suffering from dementia  for  half a century.  The toll on individuals and the taxpayer would be vast.

To those problems would be the prime sociological one of how and when to breed. Even if puberty was delayed in the same way general agein and a person was likely to be 50 before they bred rather than 25, that would still leave 110+ years to know their children. And who would want to have a childhood stretching out to 50 years?

Then there would be the problems of vast population inflation even if breeding rates remained as they are today because twice the longevity equals twice the population and the subsequent pressure on resources.

If age was extended beyond  160 all these problems would multiply.

There would be the very real  danger of the rejuvenation treatment being restricted to the rich or some other form of an elite. This would in effect create two species of homo sapiens. It would also provoke, sooner or later, great social unrest.

Could man ever be immortal even in principle? ? To achieve  that would require the ending of all mortal disease and the repair of all mortal  injury, but even then death from accident, war or murder would happen sooner or later.  Perhaps it will become possible to “download” a personality with all its memories and then “up load ” the personality to an artificial body or more probably a clone of the original, but what would that be,  you or something else altogether?

Don’t be bullied by the bankers

Our ears and eyes are being incessantly  assaulted by a mixture of whining and threats by bankers  and the leaders of big business along the lines of how they cannot possibly remain in Britain if the “penal” income tax of 50% on taxable  incomes over £150,000 is not scrapped, corporation tax massively reduced and the multifarious existing tax loopholes for companies and individuals left unplugged.   Let us imagine what would happen if  they carried out their threat and left.

The place to start is to look at the take from the various taxes. Here are the projected Treasury estimates  for  the financial year 2010/11:

 £billions

150           Income tax                                      

 99             National Insurance                       

 81             VAT                                                      

 46             Excise  (petrol,booze and and fags)      

 43             Corporation tax                                 

 25             Business rates                                       

 25             Council tax                                           

79              Other                                                    

548            Total                           

Easy-to-browse Budget document pages 8/9

http://www.hm-treasury.gov.uk/junebudget_easyread.htm

The first thing to note is that Corporation tax comprises a mere 7.84%  and  income tax, National Insurance and VAT combined bring in 60.21%. Hence, although £43 billion is not to be sniffed at it is still a very small part of government revenue. This will doubtless come as a surprise to most people who are besieged with propaganda about how vital corporation tax is to the economy.

Of course there is no prospect of Britain suddenly losing all or most of the corporation tax,  because we know from previous periods of much higher British taxation than is now proposed that most who threatened to leave did not do so and, in any case, most of private enterprise economic activity has of necessity to operate with any country’s tax system.  Moreover, as the Euro bids fair to go over the cliff to oblivion at worst and to stagger along supported by Germany (which will undermine their economy) at best, Britain is looking like more and more of  the  safe EU haven for business and individuals. 

The total tax (all taxes) paid by  the UK  financial sector, according to a recent PricewaterhouseCoopers report, was   “Taxes paid by financial services companies were worth £53.4bn in the 12 months to March” 2010. http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8204623/Financial-services-sector-pays-most-tax-to-UK-Government.html

That is a substantial amount but it is only around  10% of the tax collected in 2009/10 financial year.  Again, as with corporation tax,  there is no way the majority of that economic activity is going to move  out of Britain because much of it serves the domestic British market and because Britain has the structural advantage of having many of the internationally important  financial institutions on its soil. But let us suppose half of the tax paid was lost by personnel and businesses moving abroad. Compared to the quite fantastic  sums of money  - hundreds of billions –  which these supposed financial wizards have already cost Britain, a cost which will continue rising as the bad debts keep growing,  £26 billion lost would be a drop in the ocean.  

But the PwC  estimate  of tax paid may be too high. The reported tax take from the City in the  financial year 2008/9 is £32.5bn (Open Europe 28 7 2009 Government reveals City firms contributed £32.5bn in tax revenue in a year) This is  interesting for two reasons: firstly, the £32.5 represents only around 5% of  the total UK budget spend for 2008/9 (excluding the bank bail-outs).  Hence, the idea that the City is massive  driver of tax revenue is objectively wrong. 

The truth is that whichever estimate is taken the  tax paid by  the City is tiny compared with the amount that the taxpayer has pumped into the banks so far – hundreds of billions and perhaps as much as a trillion. Therefore, the total amount in taxes contributed by the City since 1997 is almost certainly much less than the taxpayer has had to pump in to date. Moreover, the pain is far from over because the banks and their ilk are almost certain to have further massive bad debts to announce which will result in more taxpayer support.

The scale of the debt created by reckless behaviour in the financial sector is shown by the growth of the   national debt and its projected future growth. . The Office for National Statistics (ONS) projects a  national debt of £792 billion by the end of the 2009/10 financial year  with another possible £1.5 trillion being added before the crisis is over. (Independent 5 11 2009 1.5 trillion  could be added to national debt). This would leave Britain with a national debt of  £2.3 trillion, substantially more than current GDP which is around £1.5 trillion. Before Northern Rock was nationalised, the National Debt was officially less than £600 billion. ( It should also be borne in mind that the National Debt is substantially larger than the current official figure because Brown’s Enron-style accounting has kept the true cost of PPP and PFI off the books, most of the ongoing debt not being included in the National Debt.)

If we can only guess at what the ultimate cost will be to the British taxpayer, it is clear that that the sums involved are so vast they will  swallow up many years of the tax generated by the City. For example, if  the £2.3 trillion national debt figure is reached, that would mean the profligacy of the banks and their ilk in Britain would have saddled the taxpayer with  around £1.7 trillion pounds (the national debt before the Northern Rock crash was less than £600 billion.). Taking the £32.5 billion tax figure for the City in the past financial year, it  would require approximately  52 years of  tax revenue from the City at that level to meet the £1.7 trillion the taxpayer may have to service and/or pay down  if the predictions turn out to be anywhere near correct.

Even the City’s  contribution during the boom years is overstated, viz.:  “…we are apt to attribute the sudden spurt in Britain’s prosperity in the mid- to late-1980s to a deregulated and reinvigorated City, it owed far more to the massive windfall from the North Sea. Take a look at the numbers. In 1979, when Margaret Thatcher came to power, the amount Britain owed, as a nation, was £88.6 billion. In the subsequent six years, taxes from the North Sea (which had been pretty much non-existent previously) generated an incredible £52.4 billion. “(Edmund Conway Telegraph 4 11 2009).

There is also the question of the amount of tax bankers actually pay compared with what they would pay if they were under strict PAYE, the fate of the vast majority of British employees.   The Daily Telegraph reported (James Quinn  16 Oct 2009) that the tax due on a Goldman Sachs bonus pot of £13.5 billion  for 2009/10 would £2.5 billion.  Let’s do a bit of arithmetic. Suppose all of the Goldman Sach’s bonus pot of £13.5 bn is taxed at 40%. That would be £5.4 billion. Of course they will all have personal allowances and be taxed at the standard rate of tax up to the point where 40% rate comes into play. However,  balanced against those reductions are the NI contributions, both employee and employer, and the new 50% tax band above £150,000. That duty  would almost certainly substantially outweigh reductions caused by  the lower rate tax band duty and the personal allowances.  However, for the sake of simplicity,  let us assume that the higher rate tax band and the NI c contributions  merely balance out the lower rate tax and personal allowances. Instead of the £5.4 billion due at the 40%  tax rate the Treasury is only slated to receive less than half that amount (46.20% to be exact).. The balance is tax avoided at best and evaded at worst.  If it is only £2.5 billion the average real rate of tax on their entire earnings will be around 18% based on the entire sum being taxed at 40%., although  it could be even lower in reality depending  on  the balance  between  tax allowances and the lower rate tax band and national insurance and the higher rate tax band, possibly as low as 15%.  That would be a  substantially lower rate of tax than a worker on average pay under PAYE. Nationalise the banks and that type of  avoidance  would become a thing of the past if politicians have the courage and lack of self-interest to control banking  remuneration. 

The City of London has not been a boon to Britain, but an albatross waiting to be hung around all our necks.  The size of the financial services sector is large but it accounts for only a small part of British GDP. Estimates of its size vary but most  are  in the range of  7-10 percent of GDP. IFSL Research puts the contribution of financial services for 2007 (the height of the boom) as low as £7.6 billion, put employment in the financial services in 2008 at 1.03 million and their positive contribution to the balance of payments  in 2007 at £36.9 billion.

That leaves a great deal of other British  economic activity and employment. Even with every financial institution in the country nationalised most of that banking activity would remain. In addition, the profits to be made by cautious state banking would substitute for substantial parts of the current tax revenue which is spent by government. Moreover,  as economic commentators and politicians are beginning to acknowledge,  Britain’s heavy reliance on financial services has caused  the British economy to suffer  more than any other advanced nation in this recession  because the catastrophic losses sustained by the banks were proportionately larger because the banking sector was larger. Arguably, reducing the proportion of  Britain’s economy which is dependent  on financial services would be a good thing in itself, although nationalised banks restricted to cautious banking should not get into the same sort of difficulty  again.

Is society materially enriched by “free markets” and “free trade?

This is an impossible question to answer categorically because there is no way knowing what would have happened if protectionism had   remained full blooded throughout the last century and a half.  One can   compare growth rates under stronger or looser protection regimes,   but   they really   say little   because the other determining  factors  such  as public expenditure have  varied so greatly.   These variables also blur  judgement  about  the comparative  merits  of  controlled  and  “free”  domestic markets.

The most certain thing one  can say from the economic experience of the developed world  is that governments running commercial industries such as coal and steel  directly  is generally  a mistake.  (Governments are the natural  suppliers of universal services such as  healthcare  only because private provision of such things is never adequate.)

What  is certain is the fact that the material effects of “free  trade” are  far from uniform.  It is no consolation to those who suffer  along the  way  that others may benefit from their  disadvantage.  The  next generation  or the generation after that may  be richer but why  should their  benefit  be brought  at the cost  of  disadvantaging   a  prior generation?   Certainly no politician or political party standing at an election would dare to do so on  a platform  of “we shall make many  of you poorer to make future generations richer.”     Those living at  any point in time have their own moral context and needs.

The constant economic turmoil caused by “free trade” and its inevitable concomitant,   the  supranational  corporation,   undeniably  leads  to circumstances   which  greatly  disadvantage  large  swathes   of   the population  in the First World through the removal of First World  jobs to the rest of the world.  At worst,  these people become the perpetual victims of structural unemployment (try getting a job in an area  where the main employer closes and you have no scarce or easily  transferable skills or you are middle-aged or, indeed, try opening a new business or becoming self-employed in a depressed economy): at best they are driven into ill-paid and uncertain employment.

What is meant by material enrichment?  Britain as a case study 

The assumption is that  the material conditions for most  have improved considerably  over the past two hundred years.  Any economics  textbook will  plot  economic improvement in terms of rising  real   wages.  But those  supposedly   rising real wages are based on measures  which  are often    questionable,  incomplete  or derived from very  narrow   data such as corn prices.   Even modern measures such as the  Retail  Price Index (RPI)  are  not  static,   their  content  and  weighting  being regularly revised. Nor do such measures  fully represent the true costs of necessities,  the  most notable distortion in  Britain  being  the failure  of the  Retail  Price Index  (and  its  successor  index  the Consumer Price Index)  to reflect housing costs fully.   Any comparison between  different times  based on such measures needs to  be  treated with caution.

Of course no one in their right sense would question whether there  has been  massive   material  advance in the past two  centuries.   A  more interesting  question  in  our  context is   whether  most  people  are materially better off  now than they were in 1960s,   by which time   a fully fledged  welfare state  was bedded in,  housing,  both owned  and rented, was  reasonably  priced,  social housing was  being  built  in massive quantities,  university  education was  not  merely  free  but students subsidized with  grants,  unemployment was tiny  and inflation low.

Today   the  welfare state is constantly under attack  by  the  British political  elite  and  in  some areas such  as  NHS  dentistry  already seriously  inadequate,  while the state pension is much reduced  as   a fraction of the average wage following two decades of  increases linked to the   cost-of-living pegging rather than increases  linked  to  the average national wage. Housing  of  all  sorts  in most parts  of  the  country  is  presently absurdly   costly  and  social  housing  is  greatly  reduced   through Right-To-Buy and minimal new building since the 1980s.  The  cost  of  university education  is rocketing  and  grants  are   a distant memory.

 Unemployment remains high today even by the 2010 official figures  – approximately  2.5 million  by the  most  widely used  international measure -   figures  which   most probably   severely understate the real unemployment level  because  it ignores  the  considerable  disguised unemployment within the  2  to  3 million  people currently on long term sick benefit payments (the  1980  figure  for such people was 600,000). The increase in those staying  on at school  after  the age of 16 and going on to  university  has  also reduced the present figures by taking hundreds of thousands out of the jobs market for years.   From 1945 to the late seventies  unemployment neverrose above a million on the official claimant count and for  most of  the time  was  considerably  lower  even  with  little   disguised unemployment and  far  fewer people staying  in  education  after  the school-leaving age (which was only 15 until the mid sixties).

There   are  other  fundamental  social changes  which  bear  upon  the material  state of the nation.   Many more people today have to  travel long distances to work than they did  forty or fifty years ago.   That is  costly both in terms of fares and time.   More  generally,  it  is increasingly difficult  for someone on the average wage to  support  a family  on that wage.  That often means both parents have to  work  not from choice but necessity.

Taxation  bears much more heavily on the poorer part of the  population now than it did in the past.   Direct taxation  – income tax,  national insurance, inheritance duty -  applies to many more people  now than it did in  1960,   primarily  because a  failure  to  maintain   personal allowances and tax bands at a reasonable level. Direct taxation is also broader  in scope,  for example  VAT compared to purchase  tax.   Such taxation takes proportionately more of the income of the poor than  the rich.

It  is  a moot point whether overall people  are  generally  materially better off than they  in 1960.  They may own more trinkets such as  TVs and computers and  some imported goods such as clothes  may be at least much cheaper,  but those are  small advantages to set against the great increase in housing costs and commuting fares and the  diminishment  in social provision. Doubtless a section of society has benefited,  but it would be a brave man who wanted to argue that the condition of the vast majority has improved, especially the poorest third  of the population. 

Many  will   read this with astonishment, saying  but we have  so  much more  today,  dazzled  as they are by the many  new   products.  It  is important not to confuse technological advance with “free markets”  and “free  trade”  or general  material wellbeing.  People are  undoubtedly better  off in 2005  in terms of being able to purchase such things  as cars or electronic goods then they were in 1960.   But people in  1975 were also  better  off in those respects  than  those  who  had  lived fifteen years before. That improvement   was long before “free markets” and “free trade” had become the elite ideology.   It is worth  adding that   new products often  result in additional expenditure  regardless of whether the individual really wants the product – any product  which becomes widely used is difficult to resist.  Technological  innovations are particularly prone to induce reluctant purchases.

Do you want this potential terrorist target in the heart of London?

The United Kingdom Centre for Medical Research and Innovation (UKCMRI) was granted planning permission for a research labratory on 16 December. This is a consortium comprised of the Medical Research Council (a taxpayers funded body) , Cancer Research UK, the Wellcome Trust and University College London which is part of London University.

If built the research centre will be handling dangerous viruses which are permitted under a level 3 biohazard licence, viz:

“Biohazard Level 3: Bacteria and viruses that can cause severe to fatal disease in humans, but for which vaccines or other treatments exist, such as anthrax, West Nile virus, Venezuelan equine encephalitis, SARS virus, variola virus (smallpox), tuberculosis, typhus, Rift Valley fever, Rocky Mountain spotted fever, yellow fever,
and malaria. Among parasites Plasmodium falciparum, which causes Malaria, and Trypanosoma cruzi, which causes trypanosomiasis, also come under this level.”

The Medical Research Council currently handles even more toxic viruses n their Mill Hill site, namely, those which are permitted under a level 4 biohazard licence, viz.:

“Biohazard Level 4: Viruses and bacteria that cause severe to fatal disease in humans, and for which vaccines or other treatments are not available, such as Bolivian and Argentine hemorrhagic fevers, H5N1(bird flu), Dengue hemorrhagic fever, Marburg virus, Ebola virus, hantaviruses, Lassa fever, Crimean-Congo hemorrhagic fever, and other hemorrhagic diseases.”

To place such research on the site would be criminally irresponsible under any circumstances even if both the physical security and biohazard hygiene were first rate because of the risks of a terrorist attack. However, there can be no rational public confidence that will be the case because UKCMRI have persistently refused to give any details about how their security arrangements will be handled, even in terms which would not compromise their security, such as saying whether armed guards will be used or even whether the security will be directly employed by the consortium or sub-contracted out. There will also be groups working within the centre who are not directly working for the consortium and the public will have access to some areas. To undertake the building of the centre under these circumstances would not be merely criminally reckless but touch the confines of lunacy.

There are also issues with the disruption caused by building and the contamination of the bidding process for the site by Gordon Brown, who interfered with the process even before the formal bidding period was ended. Details of these issues can be found in my objection to the planning application which forms the first posts in the blog, as well as the detailed objections on security grounds. All the objections to the planning application which require proof are supported by documents.

Write to your MP and complain. Raise a stink wherever you can.

Further details of what is happening can be found at 

 http://ukcmri.wordpress.com/

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