Monthly Archives: October 2011

That NuLabour “mistake” over mass immigration wasn’t a mistake non-shock

Since they lost the 2010 election, the Labour Party have been religiously spinning the line that the massive immigration they presided over during their 13 years in office was a mistake. A favourite ploy is to try to concentrate all the admission of failure on the decision to allow the better part of a million migrants from Eastern Europe into Britain when new entrants were admitted to the EU. Labour’s new leader Ed Miliband was at it in September 2011. Asked by Nick Robinson of the BBC whether Labour had lied about immigration, Miliband said “I don’t think we lied but I do think we got it wrong in a number of respects. I think that first of all we clearly underestimated the number of people coming in from Poland and that had more of an effect therefore than we would otherwise have thought. And secondly, I think there’s this really important issue about people coming into the country and the pressures on people’s wages. People aren’t prejudiced but people say to me look I’m worried about the pressure on my wages of people coming into this country, I’m worried about what it does to housing supply – all those issues. Now some of that is real and some of it isn’t but I think you have to address not just tough immigration policy but underlying issues as well.”  (http://www.bbc.co.uk/blogs/nickrobinson/2011/04/ed_miliband_we.html).

The claim that the immigration was a mistake takes some swallowing.  To begin with there is the sheer volume of it.  Although there are disputes about the figures,  millions arrived  while far fewer left. The think tank Migration Watch UK estimates that from 1997-2010 the official arrivals totalled 3.2 million, while  941,000 Britons left. Approximately 80% of immigrants came from outside the EU.  The old white dominions – Australia, Canada and New Zealand – received more migrants from Britain than Britain received from them.   The greatest source of immigrants from outside the EU was the Sub-Continent.  Consequently, it   is reasonable to assume that the majority of immigrants were Asian or black. (http://migrationwatchuk.com/pdfs/MWK001-Migration-UK-report_Print.pdf).  To those official figures must be added an unknown number of illegal immigrants. Migration Watch estimates these at another one million under the Blair and Brown governments.  That may be on the conservative side, but taking it as a reasonable figure would mean that a net immigration figure of 3 million during the 13 years of Labour rule.  It is difficult to see how that vast increase in immigration – in 1997 net migration was  around 40,000 – could have happened by accident.   Just how could a Government not see what was happening for 13 years and do nothing “by accident”?

But it is not necessary to rest the case for mass immigration being a deliberate policy on the numbers and nature of the immigration. Labour in power left a number of smoking guns to show that it was indeed a deliberate policy. In 2003 the Home Secretary David Blunkett said that there was “No obvious limit” to the  immigration of skilled labour,  adding incredibly  that he did not believe there was  was a maximum population for the UK  (http://news.bbc.co.uk/1/hi/uk_politics/3265219.stm).  This was at a time when immigration had already ballooned to around 170,000 per annum.

Tony Blair  said very little about immigration beyond  while in office beyond uttering the usual pc sanctioned platitudes about how valuable immigrants were to Britain . He did say asylum applications and illegal immigration were too high, but this was done whilst allowing legal immigration to get out of hand (Blair managed to reduce asylum applications, but did nothing about illegals.  The asylum drop probably meant only that illegal immigrants chose other ways to enter Britain than  asylum).  In his autobiography Blair  mentions  immigration on precisely six pages out of 691 (pp 204/5; 523/4; 630; 678).  Here  he concentrates almost entirely on the reduction of asylum; the use of immigration as a prime lever to justify his desire for ID cards and  his wish that the EU controlled immigration. Blair does ( p 524) let the cynical cat out of the bag by boasting that he shut the immigration debate down by putting ” ID cards at the centre of the argument”  and winning “Because our position was sophisticated enough – a sort of confess and avoid’, as the lawyers say…” In short, say things have gone awry under Labour  but avoid blame by switching attention to what is to be done in the future.

Blair broke his reticence about  immigration on  29 October 2011 in an interview with the ethnic British newspaper Eastern Eye. Here he not only spoke warmly of mass and mixed immigration but claimed it was a necessity for Britain:

‘It’s been a very positive thing and there is no way for a country like Britain to succeed in the future unless it is open to people of different colours, faiths and cultures.’ ‘

He went on to say:

“That is not to say you don’t have problems at certain points, but those problems are to be overcome without losing the essence of what has actually allowed this country’s people to get on and do well.’

… I think the majority of people in Britain today are not prejudiced and can understand the benefits of migration.

‘I think what people worry about is where they feel there is no control over who comes in and there are no rules governing who comes in or not, and that is a different issue altogether.

‘It would be very unfortunate if by putting those rules into place, we view that immigration was a somehow bad thing for the country, because it is not.’  ( http://www.dailymail.co.uk/news/article-2054903/Tony-Blair-defends-opening-door-mass-migration.html#ixzz1cCP3YCrZ).

Blair’s comments give credence to the claims in 2009 of  a special advisor Andrew Neather during the Blair government years.  He maintained  that  not only was mass immigration a deliberate policy of  the Government,  it was specifically designed to create an ever more diverse society:

” I [Neather] wrote the landmark speech given by then immigration minister Barbara Roche in September 2000, calling for a loosening of controls. It marked a major shift from the policy of previous governments: from 1971 onwards, only foreigners joining relatives already in the UK had been permitted to settle here.

“That speech was based largely on a report by the Performance and Innovation Unit, Tony Blair‘s Cabinet Office think-tank.

“The PIU’s reports were legendarily tedious within Whitehall but their big immigration report was surrounded by an unusual air of both anticipation and secrecy.

“Drafts were handed out in summer 2000 only with extreme reluctance: there was a paranoia about it reaching the media.

“Eventually published in January 2001, the innocuously labelled “RDS Occasional Paper no. 67″, “Migration: an economic and social analysis” focused heavily on the labour market case.

“But the earlier drafts I saw also included a driving political purpose: that mass immigration was the way that the Government was going to make the UK truly multicultural.

“I remember coming away from some discussions with the clear sense that the policy was intended – even if this wasn’t its main purpose – to rub the Right’s nose in diversity and render their arguments out of date. That seemed to me to be a manoeuvre too far.

“Ministers were very nervous about the whole thing. For despite Roche’s keenness to make her big speech and to be upfront, there was a reluctance elsewhere in government to discuss what increased immigration would mean, above all for Labour‘s core white working-class vote.

“This shone through even in the published report: the “social outcomes” it talks about are solely those for immigrants.

“And this first-term immigration policy got no mention among the platitudes on the subject in Labour’s 1997 manifesto, headed Faster, Firmer, Fairer.

“The results were dramatic. In 1995, 55,000 foreigners were granted the right to settle in the UK. By 2005 that had risen to 179,000; last year, with immigration falling thanks to the recession, it was 148,000.

“In addition, hundreds of thousands of migrants have come from the new EU member states since 2004, most requiring neither visas nor permission to work or settle. The UK welcomed an estimated net 1.5 million immigrants in the decade to 2008.

“Part by accident, part by design, the Government had created its longed-for immigration boom.” (http://www.thisislondon.co.uk/standard/article-23760073-dont-listen-to-the-whingers—london-needs-immigrants.do).

After the 2010 election a Labour peer Lord Glasman leant further support to the idea that  New Labour’s immigration policy was deliberately dishonest in an interview with the Labour journal Progress: :

“….immigration and multiculturalism … has become ‘the big monster that we don’t like to talk about’, claims Glasman. Mass immigration under Labour, he believes, served to ‘act as an unofficial wages policy’. The party’s position, Glasman contends, occupied a ‘weird space where we thought that a real assault on the wage levels of English workers was a positive good’. More seriously, he charges the last government with having acted in a ‘very supercilious, high-handed way: there was no public discussion of immigration and its benefits. There was no election that was fought on that basis. In fact there was a very, very hard rhetoric combined with a very loose policy going on. Labour lied to people about the extent of immigration and the extent of illegal immigration and there’s been a massive rupture of trust.’

“Perhaps most controversially, Glasman calls on progressives to recognise their ‘responsibility for the generation of far-right populism’, currently manifested in the growth of the English Defence League. ‘You consider yourself … so opposed that you don’t want to talk to them, you don’t want to engage with them, you don’t want anybody with views like that anywhere near the party.’ This, he believes, is to ignore ‘a massive hate and rage against us’ from working-class people ‘who have always been true to Labour’. The solution, he says, is ‘to build a party that brokers a common good, that involves those people who support the EDL within our party. Not dominant in the party, not setting the tone of the party, but just a reconnection with those people that we can represent a better life for them, because that’s what they want.’

That process begins, argues Glasman, by understanding that ‘working-class men can’t really speak at Labour party meetings about what causes them grief, concerns about their family, concerns about immigration, love of country, without being falsely stereotyped as sexist, racist, nationalist’.”  (http://www.progressonline.org.uk/2011/04/19/labour-isnt-working/).

In true Maoist fashion Glasman soon confessed his “fault” (daring to speak honestly about race and immigration) –   http://www.newstatesman.com/blogs/the-staggers/2011/07/blue-labour-immigration-2.

In virtually any time and place other than the developed world in the modern era  the deliberate injection of  vast numbers of people into a society, many of them incapable of assimilation because of   racial difference or ethnic stubbornness, would have been considered unconscionable. It is the betrayal of the tribe, the most fundamental form of treason because once the interlopers are present in large numbers they have effectively conquered part of the receiving land’s territory.    Had Blair and Brown pursued a policy of  mass immigration because they saw it as part of their worship of market economics that would have been bad enough, a crime worthy of death in a sane world.   But it is clear from their own words that they had a more obnoxious and fundamental motive.  Blair and Brown and their political associates actively hate their own society and sought to change it utterly whilst at the same time repressing any native dissent about the changes wrought. That is not merely treason but a form of psychopathy.

But it is not only the followers of New Labour who contain the poison. The entire British political elite pay at least lip service to the same internationalist “anti-racist”  ideology.   When the Neather article appeared there was no outrage from the Tory and Lib Dem leadership. When the Blair Government’s estimate of 13,000 migrants from the new east European entrants  to the EU turned out to be  monstrously wrong as hundreds of thousands poured in, the Tories and Lib Dems said little or nothing. Nor has the Tory/LibDem Coalition Government done anything to reduce immigration since they took office.  Most tellingly, no mainstream British political party has challenged freedom of movement within the EU, without an end to which no meaningful  immigration controls can be operated.

The terrible reality is this: Britain  has a political elite to whom treason is second nature; men and women who make the profoundest of mistake of  imagining  that human beings are  interchangeable regardless of race or culture and that consequently societies  can be socially engineered without danger.   Hayek saw their nihilistic qualities  70 years ago:

“The  Left intelligentsia…have so long  worshipped   foreign  gods that they seem to have become  almost  incapable of seeing any good in the  characteristic  English institutions and traditions. That the moral   values  on which most of them pride themselves  are   largely  the products of the institutions they  are out to destroy, these socialists cannot, of course,   admit.  And  this  attitude  is  unfortunately  not confined to avowed socialists. Though one must hope that  it  is not true of the less  vocal  but  more  numerous  cultivated  Englishman,  if one  were  to  judge by the ideas which find expression in current  political discussion and propaganda the  Englishman who not only  “the language speak that  Shakespeare  spake”,  but also “the faith and morals  hold  that   Milton  held”  seems to have almost vanished.  [The Road to Serfdom p222 Chapter Material Conditions and Ideal Ends]  

Some would object that none of British political elite counts as  Leftist  today. That is true in the sense that the classic economic aims of socialism – the public ownership of the means of production – were dumped by  Blair’s transmogrification of Labour to New Labour.  But that is all which as been dropped. The Fabian desire to interfere with and control people’s lives through social engineering has become even stronger and the form of internationalism  (very much a left project) we call globalism has captured  the major British political parties.  All mainstream British politicians now pay lip service at least to the  attendant ideology which has been developed to both  justify  the desire  to control people’s lives and promote globalism, namely, political correctness.  The politicians who subscribe to it are the heirs of  the “Left intelligentsia” Hayek found in Britain.

The end of the offence of “insulting behaviour”? Don’t you believe it

As part of an ongoing consultation on” police powers to promote and maintain public order” (http://www.homeoffice.gov.uk/publications/about-us/consultations/police-powers/) the offence of insulting behaviour is being reviewed, possibly with a view to repeal.  This would be welcome because it is an offence which at bottom relies on a subjective judgement by those making a decision to arrest, those deciding to charge and the jury or magistrate.   It is  an open invitation to state abuse because  a government can produce a situation whereby dissidents will be prosecuted and those agreeing with the political class  left unmolested by the law.

Welcome as the ending of the offence would be, the proposal as framed in the consultation would be next to meaningless  because prosecutions could be taken under  different  laws for the same behaviour with a similar risk of bias.

Public Order Act 1986

The offence is contained within section 5 of the Public Order Act 1986, viz: .

5 Harassment, alarm or distress.

(1)A person is guilty of an offence if he—

(a)uses threatening, abusive or insulting words or  behaviour, or disorderly behaviour, or

(b)displays any writing, sign or other visible representation which is threatening, abusive or insulting, within the hearing or sight of a person likely to be caused harassment, alarm or distress thereby.

(2)An offence under this section may be committed in a public or a private place, except that no offence is committed where the words or behaviour are used, or the writing, sign or other visible representation is displayed, by a person inside a dwelling and the other person is also inside that or another dwelling.

(3)It is a defence for the accused to prove—

(a)that he had no reason to believe that there was any person within hearing or sight who was likely to be caused harassment, alarm or distress, or

(b)that he was inside a dwelling and had no reason to believe that the words or behaviour used, or the writing, sign or other visible representation displayed, would be heard or seen by a person outside that or any other dwelling, or

(c)that his conduct was reasonable.

(4)A constable may arrest a person without warrant if—

(a)he engages in offensive conduct which [F2a] constable warns him to stop, and

(b)he engages in further offensive conduct immediately or shortly after the warning.

(5)In subsection (4) “offensive conduct” means conduct the constable reasonably suspects to constitute an offence under this section, and the conduct mentioned in paragraph (a) and the further conduct need not be of the same nature.

(6)A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.” (http://www.legislation.gov.uk/ukpga/1986/64)

All that is being  proposed is the removal of the word “insulting”.   If that is done it will leave “threatening” and “abusive” which could be used just as readily  to encompass that which is deemed insulting.

The position is worsened because the consultation mentions only the use of insulting in section 5,  but the word is also in sections 4 and 4A:

“4. Fear or provocation of violence.

(1)A person is guilty of an offence if he—

(a)uses towards another person threatening, abusive or insulting words or behaviour, or

(b)distributes or displays to another person any writing, sign or other visible representation which is threatening, abusive or insulting, with intent to cause that person to believe that immediate unlawful violence will be used against him or another by any person, or to provoke the immediate use of unlawful violence by that person or another, or whereby that person is likely to believe that such violence will be used or it is likely that such violence will be provoked.

(2)An offence under this section may be committed in a public or a private place, except that no offence is committed where the words or behaviour are used, or the writing, sign or other visible representation is distributed or displayed, by a person inside a dwelling and the other person is also inside that or another dwelling.

(3)A constable may arrest without warrant anyone he reasonably suspects is committing an offence under this section.

(4)A person guilty of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding 6 months or a fine not exceeding level 5 on the standard scale or both.

4A Intentional harassment, alarm or distress.

(1)A person is guilty of an offence if, with intent to cause a person harassment, alarm or distress, he—

(a)uses threatening, abusive or insulting words or behaviour, or disorderly behaviour, or

(b)displays any writing, sign or other visible representation which is threatening, abusive or insulting, thereby causing that or another person harassment, alarm or distress.

(2)An offence under this section may be committed in a public or a private place, except that no offence is committed where the words or behaviour are used, or the writing, sign or other visible representation is displayed, by a person inside a dwelling and the person who is harassed, alarmed or distressed is also inside that or another dwelling.

(3)It is a defence for the accused to prove—

(a)that he was inside a dwelling and had no reason to believe that the words or behaviour used, or the writing, sign or other visible representation displayed, would be heard or seen by a person outside that or any other dwelling, or

(b)that his conduct was reasonable.

(4)A constable may arrest without warrant anyone he reasonably suspects is committing an offence under this section.

(5)A person guilty of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding 6 months
or a fine not exceeding level 5 on the standard scale or both.]” (http://www.legislation.gov.uk/ukpga/1986/64)

It would be very easy to effectively shift the offence of insulting behaviour from section 5 to sections 4 and 4A, because what constitutes a threat of violence (section 4) is a subjective judgement and intent (section 4A) is a very flexible concept.

Crime and Disorder Act  1998

In addition to the Public Order Act 1986 there is the Crime and Disorder Act 1998 http://www.legislation.gov.uk/ukpga/1998/37/contents/enacted). This Act contains the ASBO and “Racially Aggravated Offences” authorisation. The Government has signalled its intention to replace the ASBO with  The Criminal Behaviour Order (http://www.homeoffice.gov.uk/publications/consultations/asb-consultation/criminal-behaviour-order?view=Html) , but it is probable that its effect on free expression will be broadly that of the ASBO.  The relevant ASBO  section of the Act is:

“1. Anti-social behaviour orders

(1)An application for an order under this section may be made by a relevant authority if it appears to the authority that the following conditions are fulfilled with respect to any person aged 10 or over, namely—

(a)that the person has acted, since the commencement date, in an anti-social manner, that is to say, in a manner that caused or was likely to cause harassment, alarm or distress to one or more persons not of the same household as himself; and (b)that such an order is necessary to protect persons in the local government area in which the harassment, alarm or distress was caused or was likely to be caused from further anti-social acts by him;

and in this section “relevant authority” means the council for the local government area or any chief officer of police any part of whose
police area lies within that area.” (http://www.legislation.gov.uk/ukpga/1998/37/section/1/enacted)

Again, it is easy to see how an effective offence of insulting behaviour can be created, although here the situation is complicated by the fact that the ASBO is a civil law order . However, its breach can result in the criminal offence of contempt of court.

The racially aggravated offence section is this:

28 Meaning of “racially aggravated”.

(1)An offence is racially aggravated for the purposes of sections 29 to 32 below if—.

(a)at the time of committing the offence, or immediately before or after doing so, the offender demonstrates towards the victim of the offence hostility based on the victim’s membership (or presumed membership) of a racial group; or.

(b)the offence is motivated (wholly or partly) by hostility towards members of a racial group based on their membership of that group.

(2)In subsection (1)(a) above—.

“membership”, in relation to a racial group, includes association with members of that group;

“presumed” means presumed by the offender.

(3)It is immaterial for the purposes of paragraph (a) or (b) of subsection (1) above whether or not the offender’s hostility is also based,
to any extent, on—.

(a)the fact or presumption that any person or group of persons belongs to any religious group; or.

(b)any other factor not mentioned in that paragraph..

(4)In this section “racial group” means a group of persons defined by reference to race, colour, nationality (including citizenship) or
ethnic or national origins (http://www.legislation.gov.uk/ukpga/1998/37/section/28/enacted).

Because of the ever increasing expansion of the remit of what is deemed racist in Britain, this potentially has an extremely broad application.  Those who doubt the grip of the anti-racist mania  might care to reflect on the fact that we are living in a country in which the placing of golliwogs in a shop window results in a police warning  (http://www.dailymail.co.uk/news/article-452477/Police-order-shopkeeper-remove-golliwogs-window.html) and  a Rangers football supporter can be jailed for 8 months for engaging in anti-Catholic abuse at a Rangers v Celtic game (http://www.irishtimes.com/newspaper/world/2011/1018/1224305996315.html). Moreover,  because of the elevation of racism to the ultimate crime in the politically correct lexicon, the police are very keen to investigate such complaints where they involve a complaint from a non-white accuser.

Although specific  criminal law relating to them has not been created,  there has been a drive in the past 15 years  towards creating a range of so-called “hate crimes” other than those relating to racism, especially those deemed homophobic or abuse directed at the disabled.  In principle, any words deemed to be discriminatory whatever the situation could be caught by the Public Order Act 1986.

Race Relations Act 1976

Finally, there is the Race Relations Act 1976.  Part IX deals with incitement to racial hatred:

70 Incitement to racial hatred

(1)The Public Order Act 1936 shall be amended in accordance with the following provisions of this section.

(2)After section 5 there shall be inserted the following section:— “Incitement to racial hatred.

(1)A person commits an offence if—

(a)he publishes or distributes written matter which is threatening, abusive or insulting; or

(b)he uses in any public place or at any public meeting words which are threatening, abusive or insulting,

in a case where, having regard to all the circumstances, hatred is likely to be stirred up against any racial group in Great Britain by the matter or words in question.

(2)Subsection (1) above does not apply to the publication or distribution of written matter consisting of or contained in—

(a)a fair and accurate report of proceedings publicly heard before any court or tribunal exercising judicial authority, being a report which is published contemporaneously with those proceedings or, if it is not reasonably practicable or would be unlawful to publish a report of them contemporaneously, is published as soon as publication is reasonably practicable and (if previously unlawful) lawful; or

(b)a fair and accurate report of proceedings in Parliament.

(3)In any proceedings for an offence under this section alleged to have been committed by the publication or distribution of any written matter, it shall be a defence for the accused to prove that he was not aware of the content of the written matter in question and neither suspected nor had reason to suspect it of being threatening, abusive or insulting.

(4)Subsection (3) above shall not prejudice any defence which it is open to a person charged with an offence under this section to raise apart from that subsection.

(5)A person guilty of an offence under this section shall be liable—

(a)on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding £400, or both ;

(b)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or both ;

but no prosecution for such an offence shall be instituted in England and Wales except by or with the consent of the Attorney General.

(6)In this section—

‘ publish ‘ and ‘ distribute’ mean publish or distribute to the public at large or to any section of the public not consisting exclusively of members of an association of which the person publishing or distributing is a member;’ racial group’ means a group of persons defined by reference to colour, race, nationality or ethnic or national origins, and in this definition ‘ nationality ‘ includes citizenship;’ written matter’ includes any writing, sign or visible representation.”

(3)In section 7(2), after the words ” section 5 ” there shall be inserted the words

“or 5A”.

There is again the use of “insulting” as constituting an offence. Because the scope of what is racist is now so broad, in principle it could be used against  a very wide range of what is onsidered insulting.

Just a cosmetic exercise

In the light of these various laws and the Home Office’s , There is no reason to believe that the offence of insulting behaviour will be removed from the Statute Book in anything other than the pedantic  sense that the word “insulting” is removed from section 5 of the Public Order Act 1986.

It can also be seen from the Acts quoted how thoroughly the British state is equipped to deal with any dissent from its liberal internationalist politically correct ideology.

Politically incorrect film reviews – Tinker, Tailor, Soldier … Spy

Directed by Tomas Alfredson
Running time 127 minutes

Cast

Gary Oldman as George Smiley

Colin Firth as Bill Haydon

Tom Hardy as Ricki Tarr

Mark Strong as Jim Prideaux

Ciarán Hinds as Roy Bland

Benedict Cumberbatch as Peter Guillam

David Dencik as Toby Esterhase

Stephen Graham as Jerry Westerby

Simon McBurney as Oliver Lacon

Toby Jones as Percy Alleline

John Hurt as Control

Svetlana Khodchenkova as Irina

Kathy Burke as Connie Sachs

Roger Lloyd-Pack as Mendel

Christian McKay as Mackelvore

Konstantin Khabenskiy as Polyakov

This one of those rare films which should be an hour longer rather than an hour shorter.  Why? Because the  subject matter of Tinker, Tailor, Soldier ….Spy  is so intricate  that without considerable scene setting and back stories, which were absent in the film,  I doubt whether anyone would be able to readily follow the plot let alone  get full value from the film if they were not familiar with the Smiley novels , whether that be from the books, previous films, television adaptations or the recent excellent BBC Radio 4  production of all the eight  books in which Smiley appears either as a central character or on the periphery of the tale.

No one new to the stories would have  understood Smiley’s  relationship with his  adulterous  and glamorous wife Lady Ann or his intense  psychological bond withKarla, the Soviet spymaster . No one new to Smiley would have a clue from the film what position  Peter Guillam held  (in charge of the unit which did the dirty work including assassinations, blackmail and robbery known as scalphunters)  or been aware that Bill Hayden is supposed to be a talented painter who perhaps  secretly wishes he had made painting rather than espionage his life. No one new to Smiley’s world  would understand the moral struggles he has within himself  as the Soviet enemy becomes ever less sharply  focused  and British power and influence ebbs away.

The  confusion caused by the lack of scene setting  and back story telling  is added to by the large ensemble cast and the frequent switches of characters and locations.

The plot is briefly this.  The head of  the Circus (MI6) Control  suspects there is a  Soviet mole in a high position within the Circus (MI6). He sends Jim Prideaux  on an unauthorised mission to Czechoslovakia to meet a Soviet General who claims  he knows the mole’s name.  Prideaux is betrayed and shot, although not killed and returns to England  where he is secretly  put out to grass teaching in a private school.

This highly embarrassing failure results in Control being forced  into retirement along with his right-hand man Smiley.   However, the suspicion about a mole  is re-ignited when a Circus agent Rikki Tarr discovers during  a love affair with a Moscow agent  evidence that there is indeed a highly placed mole in the Circus, but before she tells him who it is, the Soviet agent  is kidnapped and taken back to the Soviet Bloc where she is killed.

Oliver Lacon, the senior civil servant  responsible for the Intelligence Services,  becomes  aware of this new evidence  and  brings Smiley surreptitiously  back into service   to investigate whether  there is a Russian mole  in the upper reaches of the Circus.   Tarr works for Peter Guillam  and he is brought  into the picture as Smiley’s aide.   Control’s successor Alleline and his deputies   Bill Haydon, Roy Bland, and Toby Esterhase are the prime suspects and  have the code names Tinker, Tailor, Soldier, Poor man.   They have no knowledge of what Smiley et are up to. The film consists of Smiley, with the help of Guillam and a retired special branch officer Mendel,   tracking down the traitor.

Oldman is a good but not great Smiley. Alec Guinness  (in the TV series) and Simon Russell Beale (in the Radio 4 plays) were better. That is partly due to  the rushed and cramped nature of the film which did not allow the character of Smiley to develop and expand as TV and Radio could and did (the TV version of Tinker was spread over seven episodes; the most recent Radio adaptation over 3 hours) ) , not least because Smiley’s sufferings over  and longings for  his  wife Ann are barely touched upon (she had an affair with Bill Hayden);  partly because  the camera too often focuses overlong  on a poker faced Oldman to convey Smiley’s  generally undemonstrative  and  private nature and partly because Oldman representation of  Smiley  is not quite posh enough. The last is a subtle thing but telling. Oldman’s Smiley seemed to be concentrating  just a little too hard on his RP accent, like a man speaking a foreign language in which he has made himself  so fluent that he almost but not quite passes for a native.  Nonetheless,  Oldman comes into his own as the film progresses and he becomes ever more actively involved with the search for the  mole. Then you see the publicly withdrawn, self –contained personality suddenly swept up in the thrill of the chase and from that energy become incisive and decisive to the point of cruelty.

Firth as Hayden is unreservedly good. The part is made for him with his fading  matinee idol looks, acerbic tongue and vast charm . Unlike Oldman he merely seemed to be playing himself. Toby Jones as the ultra ous but limited Scotsman Percy Alleline fitted the bill  exactly, as did Kathy Burke as Connie Sachs,  the terminally nostalgic, dipsomaniac  ex-Circus researcher with the incredible memory.  John Hurt as Control  simply  plays himself.

David Dencik as the ex-patriot Hungarian Toby Esterhase  is decent enough,  but he did not quite capture the character’s  desperate and never to be satisfied desire to be unreservedly accepted as one of the MI6 club. The recent Radio adaptation gave Esterhase one of those bogus posh English accents which fails from being a little too precise, a little too dated in its vocabulary and phrasing and  with the slightest remnants of a foreign accent.  That admirably conveyed both  Esterhase’s valiant attempt to gain an unqualified acceptance within the Circus and his  failure to achieve that end.  Dencik’s  Esterhase  was simply a nervous uncertain foreigner,  his biggest fear being that he would be sent back to (Communist) Hungary.

Of the other characters Tom Hardy as Ricki Tarr is not quite cockney enough, Jim Prideaux not posh enough; Mendel  has much too little screen time; Roy Bland is utterly peripheral to the story as it unfolds  and  Lacon has just the right superior  and supercilious manner.

In all respects but one,  this is wonderfully  politically incorrect film. Set in 1970s Britain there is not a single black, brown or yellow face to be seen and,  apart from the Scotsman Alleline and the Hungarian Esterhase,   the major characters are  all English, most  of them drawn from the upper-reaches of English society . To add to the horror  for white liberals, women are peripheral and subordinate to the men and everyone smokes like chimneys.

The only consolation for  the politically correct is the turning  of the heterosexual Peter Guillam into a homosexual. This not  only adds nothing to the plot,  but positively diminishes  the character. Guillam is a heavy, a public school educated heavy, but a heavy nonetheless.  He acts as Smiley’s  minder and dishes out the rough stuff on Smiley’s behalf  when someone needs to be made a little more cooperative.  Being gay and a heavy is not I would suggest an obvious combination in the eyes of the public.  To the mistaken and utterly gratuitous change of sexual inclination,  is added the performance  of Cumberbatch as Guillam  in which he  projects  all the physical menace of  a wet sponge whilst sporting the most ridiculous haircut seen in the cinema since Javier Bardem in No country for old men.

This  is not a bad film; rather, it is a film which could have been much better and most  importantly, vastly  more comprehensible to those unfamiliar with the Smiley novels. It was perhaps an impossible task to fit such a complex novel  which not only has an intricate plot but relies very heavily on character depiction  into two hours.  But for all its flaws it is much superior  production to the vast majority of the traffic which hits film screens.   If you are English  it  also has the inestimable plus of being  England as it used to be. Go and see it even if you cannot fully understand the plot.

It isn’t a crisis of capitalism but a crisis of globalism

It isn’t a crisis of capitalism but a crisis of globalism

Robert Henderson

Contents

1. Turning a blind eye

2. What is capitalism?

3. Globalisation and the developed world

4. The suppression of dissent

5. The developing world

6. The loss of  national control

7. The undeveloping world

8. Supra-national  politics

9. Just another outbreak of an old  disease

10. Unemployment as a barometer of an economic system

11. Capitalism in a protected domestic economy

1. Turning a blind eye

Amongst the wailing and gnashing of teeth from all parts of the political mainstream over the ongoing  economic crisis  its prime cause goes unmentioned.   Free market capitalism, which has been accepted , whether enthusiastically or resignedly, by Western elites for the past quarter  of a century  as the only economic theory worthy of support, is being questioned.  Even some of its firmest adherents are questioning whether  there has been  too much freedom of individual  action in the economic sphere. Some mainstream commentators who write for resolutely “free market” supporting newspapers  like  the Daily Telegraph and Daily Mail, are even beginning to wonder if capitalism is in a crisis from which it may not recover:

http://www.dailymail.co.uk/news/article-2022993/Capitalism-crisis-80-years-ago-banking-collapse-devastated-Europe-triggering-war.html#ixzz1aUJrGGaG

and

http://www.telegraph.co.uk/finance/financialcrisis/8814560/If-capitalism-does-fail-the-alternative-is-far-far-worse.html

Those coming from the left are unsurprisingly joining in the “end of capitalism” rhetoric (http://www.marxist.com/world-capitalism-in-crisis-1.htm). What you will not find are many  if any  mainstream politicians and economic  commentators  addressing the real source of the crisis:  the cloying and uncritical embrace of the internationalist creed  which we call globalism by Western elites, especially those in Britain and the USA.

Before I turn to the ill  effects of globalism  the tricky  matter of defining capitalism needs to be addressed because  there is a case for saying that capitalism is a state of theoretical  purity which does not exist in the real world.

2. What is capitalism?

Capitalism is seriously difficult to define because it shares so much with economic systems which are not considered to be capitalist.  For example, if the state undertakes an  economic activity such as providing healthcare in an organisation such as the NHS or nationalises the railways and coalmining are they capitalism in action? After all they employ capital,  land and labour, the three  factors of production in classical economics and provide goods and services to the public just as a private business would do.

What do  state enterprises  lack which private business has? The entrepreneur? Well, most large companies are not run by entrepreneurs but corporate administrators.   The profit motive?  Perhaps, but what about state enterprises which consistently make profits for the taxpayer such as the Post Office in Britain while it had a monopoly?  Freedom of action?  Private enterprises are heavily constrained by law and state regulation in every developed economy and state organisations are often granted a remarkable operational freedom.   The risk of going bust if they do not perform? Any state enterprise can in principle be ended or privatised  while private companies when they are large enough  have a good chance of being rescued by taxpayers,  vide the banks in the present financial crisis.  An absence of private money?   State businesses frequently draw  all or much of  their income from  payments they receive from the general public in return for goods or services,  for example, nationalised  energy companies .  Moreover,  many  companies which are classified as private enterprise organisations draw all or much of their income from  taxpayer funded contracts. Then there are the not-for-profit organisations, especially the charities, which increasingly  act as sub-contracted arms of the state as they draw much of their income from the taxpayer  and the rest of their income from donations. Individual and corporate. How should  they be classified?  Part of capitalism? Part of the state? A separate class of economic actor altogether?  It could be any of the three options.

To all those blurrings  of the distinction between private enterprise and public  service must be added  the  macro-economic fact that  all developed economies have a massive part of their GDP in the hands of the state.  The mixed economy is a fact of all reputedly capitalistic economies.  Does that render the idea of capitalist society redundant?   In a sense it does. The broad  differences  in developed  (and increasingly the more advanced of the developing countries)  is in the degree to which state control and ownership is balanced against private enterprise.

There are of course qualitative  differences in the application of the law as it affects the economy and the nature of the control which is exercised over the economy by the state,  especially in areas such as the banking system and the ability of foreign companies to operate. For example,  while countries such as Britain and the USA  allow vast swathes of their economies to be purchased by foreign countries, China will often in practice only allow foreigners in on the basis of joint ventures with Chinese firms. (http://www.booz.com/media/uploads/Making_Partnerships_Work.pdf ) . Nonetheless, there is a general similarity in the economies in as much as all are a mixture of public and private and all permit some degree of government interference and direction of  the market.

Despite the difficulty of definition  the term capitalism is not without utility. There is clearly a difference between a company which acts on its own behalf  without state direction or assistance and a nationalised industry. Parts of mixed economies are capitalist if by that is meant private companies which  operate without  deriving any part of their revenue from the taxpayer,  have management free to act  within the general restraints  of the law  without  state direction  and  which operate on the principle that they stand or fall on  whether they can at least break even.  The companies which receive  taxpayers’ money, especially those which rely on the taxpayer for  only part of their income,  also  have much  of the aspect of a pure private enterprise business in that they will in practice dictate how things are done, the public body funding their work being essentially in the position of a customer who merely sets ends not means.  Capitalism is a spectrum of behaviours  rather than  a clear-cut behaviour.

It is important to understand that  free trade does not equal capitalism. Free trade is   simply the exchange of goods, services and capital between countries. It says  nothing about the circumstances in which these things  are created. These  can be anything from  a command economy to the economies in which free enterprise is most dominant.

3. Globalisation and the developed world

Globalism equals destabilisation.   Until  the financial crash of 2008 the globalists argued that ever increasing free trade generally and the internationalisation of financial markets in particular  increased  economic  and  international  stability by  spreading risk more widely  (which reduced the cost of credit and consequently increased economic activity ) and by that by making countries ever more interdependent  the likelihood of international conflict  was ameliorated.  In fact, both ideas were pipe dreams and the exact reverse  of what globalism actually creates.

There are two  central elements of globalism. The first  is the end (or at least considerable diminution) of protectionist practices. Domestic  economies in the developed world are stripped of  great swathes of their economies, including strategically important ones such as coal mining and steel making, by the removal of protectionist barriers such as quotas, embargoes and tariffs. This  results in either entirely foreign imports  from low-wage economies such as China driving out the necessarily higher priced goods made in the developed nations or businesses in the developed world throwing in the towel and off-shoring their production of goods and services to low-wage economies.    To that is added in much of the developed world the banning of state aid and intervention  by both  treaties  and the domestic laws and rules imposed by national governments in thrall to an uncritical belief in  laissez faire economics and small government.

Getting rid of protectionist barriers and privatising state owned industries  massively reduces opportunities  for employment for the native populations of the  developed countries.  This creates greater competition for jobs which reduces wages and other conditions of employment and   increases insecurity of employment.  In some instances,  as occurred with Britain in the 1980s,  the opening up the domestic markets  to imports results in the  most dramatic and socially damaging of economic traumas,  structural unemployment, which lays waste the primary sources of employment of  large areas , the effects of which carry down the generations.

The second central element of globalism, the free movement of peoples across borders, amplifies these consequences  of free trade  and adds other destabilising  effects.  Mass migration of labour inevitably  goes from lower-wage economies to higher wage economies because there is no incentive for those in higher paid economies to take a run-of-the-mill-job in a lower-paid economy. In a addition,  developed economies offer not only higher wages but also many non-monetary benefits such as those provided by a fully-fledged welfare state which are absent in developing economies.

Mass migration allows employers to radically cut wages in the higher-wage economies and greatly increases competition for most  jobs, especially those which require little training or skill.  The difference in cost of living between the immigrant’s country of origin (low)  and the developed country they go to (high)  are important. Immigrants, whether unskilled or skilled,  are willing to work in such jobs for mediocre pay and live in poor, cramped  accommodation because they know that they will be able to  save a few thousand pounds in a year or two . They can do this even if by  living honestly by paying tax. But  often they  will  be paid cash- in-hand (no deductions for tax) ,  and live in in a  squat (the taking over of someone’s house or flat without permission and living there rent free.   Many will work  while they are claiming unemployment benefits.   If they have saved four or five thousand after a year or two,  this  will be enough to buy a house or flat in their own country  where prices are a fraction of what  they are in a developed country.  (Give Britons the chance to save  the price of a house or flat in Britain by working for a couple of years in those conditions in a foreign country and you are likely to be trampled in the rush).

As more and more immigrants come to developed economies, the position of the native worker worsens. This is  because  not only  are there are more people chasing jobs, but also because native employers increasing rely on gang masters and other recruiters  who are foreign and only  want to  employ  foreigners (frequently foreigners from their own country:  in the following  case it was a Bulgarian employing Bulgarians http://www.express.co.uk/posts/view/277363/Workers-are-fired-for-being-British). Sometimes employers deliberately exclude  native workers by insisting that those employed speak a foreign  language in the workplace, for example,  http://www.dailymail.co.uk/news/article-1257784/Biggest-Asda-meat-supplier-excludes-English-speakers-instructions-given-Polish.html ).

In Britain many employers excuse their recruitment of foreign workers  on the grounds that they either cannot get native workers to apply or that  those who do apply are unqualified for the job.  As the vast majority of the British jobs being taken are low or non-skilled  and there are now millions of native  Britons desperately seeking work of any kind, this must be an excuse in most instances  (http://www.metro.co.uk/news/878903-500-queue-for-just-20-sales-assistant-jobs-at-new-poundland-store#ixzz1b85oCrLr)

Even in the case of skilled workers there is discordance between the claim of lack of skilled applicants and the numbers of skilled British workers unable to find jobs. For example, there are  large numbers of doctors and nurses trained in Britain who cannot find posts in Britain,  while at the same time the NHS is recruiting heavily from abroad. (http://englandcalling.wordpress.com/2011/09/09/no-need-to-speaka-da-english-in-the-nhs/).  More generally,   new British graduates are finding great difficulty in getting both appropriate jobs and, increasingly, any job at all (http://www.telegraph.co.uk/education/educationnews/8283862/Graduate-unemployment-hits-15-year-high.html).

All of that suggests that British employers are favouring foreigners for reasons other than they give. The most plausible causes are lower pay and inferior conditions being accepted by immigrants, the greater ease with which immigrants can be sacked , especially those who are here illegally,  and the possibility of bribes being paid, especially by foreign agencies, gangmasters using foreign labour and people traffickers,  to those recruiting for British employers to persuade them to choose immigrants over native workers.    An example would be where a public service employer uses a foreign agency to recruit abroad.  The agency will receive a hefty fee from the public service employer for each foreigner recruited and  that fee will be  split between the agency and  a corrupt recruiter in the UK.   There is also a natural disincentive for native workers to seek work where they would be in the ethnic minority in their own land, for example, if you are English imagine working a factory where the common language is Polish or Hindi even if it is not a requirement of the job that the language is spoken.

These various  practices mean large swathes of employment become effectively closed to the native population. The extent of the problem in Britain can be seen from one stark statistic: out of two million new jobs created under 13 years of the last  Labour Government 1.8 million went to immigrants (http://www.dailymail.co.uk/news/article-1325013/Migrants-took-9-10-jobs-created-Labour.html)

The removal of protection for the domestic market, off-shoring and mass immigration has meant that material inequality has grown considerably in the developed economies  over the past quarter of a century as the wages of those competing with immigrants has fallen and unemployment has risen, including an army of long term unemployed.   The countries showing the greatest growth between the haves and the have nots  have been the USA and Britain, arguably the two countries most committed to globalism. (http://www.guardian.co.uk/world/2011/sep/18/bronx-manhattan-us-wealth-divide).

But there is much more to globalisation than the creation of material inequality. Mass immigration does not just create competition for jobs. It means there are more people seeking housing, healthcare, benefits and  education .   This further increases insecurity and resentment amongst the native population, especially amongst the poor because  they  are the ones most reliant on the welfare state  and consequently  are the people most likely to be in direct completion with the immigrants.

More generally, there is the natural resistance to large numbers of foreigners  settling in an area. Any  sizeable  influx of immigrants is never evenly spread. Immigrants in large numbers congregate  in self-created ghettos which radically changes the nature of the area they settle in. This  arouses resentment amongst the native population, most fiercely  and poignantly by those directly affected, but as immigrant numbers grow massively, increasingly  amongst the native population generally,  regardless of whether people live in areas of heavy immigration.   The concern is not primarily that the immigrants provide completion for jobs, houses and social services , although those are important triggers of resentment, but anger at territory being  effectively conquered by  immigrants (http://englandcalling.wordpress.com/2011/02/22/part-of-england-has-been-invaded/)

4. The suppression of dissent

Those consequences  would be enough to condemn globalism as a political creed , but there is much more to be set in the debit column of its balance sheet.

Because native populations in the  richer countries  are increasingly disadvantaged and angered at the effects of  immigration, the elites who have permitted it and are committed to globalism have to control the resentment and anger. Politicians  do this in various ways. They use  their power to prevent any honest  opposition to  mass immigration and its consequences by  passing laws which criminalise  the native population if they express  dissent to the policy. They create other  laws which in practice privilege immigrants, for example,  the British Race Relations Amendment Act  2000 which forces all public bodies in the UK to prove they are not discriminating against racial and ethnic minorities. They  use their ready access to the mass media to incessantly  push the “multiculturalism is good” message  and  force it  in school curriculums – in Britain there is barely a subject untouched by its taint, even those subjects such as physics, chemistry and maths which you might imagine would be immune can be taught from this ethnic perspective or that ethnic perspective (Islamic maths anyone?)

Companies which rely on public contracts and charities have to play by the same multicultural rules as public service organisations  and large public companies whether  or not r they are reliant on public contracts in practice do so voluntarily.  As an overarching deterrent, all employers are liable to be taken to Employment Tribunals if someone claims racial discrimination relating to dismissal, unequal treatment or the failure to get a job and risk unlimited awards against them if a complaint against the employer is upheld.

The  multicultural message and the intimidation of dissenting views is religiously supported  and underpinned  by the British  mass media , the members of  which  all publicly subscribe to the idea that racial discrimination (by which they mean any preference for any racial or ethnic group not approved of by the politically correct) is the ultimate evil  and as a consequence are only too willing to conduct a hate campaign against anyone at whom the cry “racist” is directed and ensure that anyone with a dissenting voice is kept from public view.

The consequence of this wholesale  enforcement of the multicultural dogma is that anyone in Britain who expresses  an opinion which suggests that mass immigration and its consequences are less than the quickest path to social Nirvana runs the risk of penalties which range from losing their job (especially if the person works in the public sector) to being imprisoned  for inciting racial hatred.

As for the economic aspects of globalism, Western political elites  and their allies in the media and other positions of power and influence have overwhelmingly  bought into the idea of free trade, at least to the extent that they have been willing to agree to greatly reduced protectionism. Those who would vigorously oppose the idea of out-of-control  laissez faire economics at home and abroad have been  almost entirely censored out of the public picture.  On the odd occasions when some brave soul breaks the censorship and puts forward in public complaints about mass immigration reducing wages or taking jobs and scarce housing or the export of jobs to the developing world ,  these are squashed by the media proponents of globalism with mantras such as  “It’s inevitable because we live in a  global world” ; “It’s market forces”;  “We have to compete globally”.

5. The loss of  national control

On top of all this is piled two  things, the loss of control  of national governments over finance and the signing up of nation states to treaties which emasculate democracy by granting powers to supra-national bodies that should rightly belong to individual states.  The  most striking example of this is the EU, where the nations of the European Economic Area  (over 30  of them) are bound to the so-called four freedoms;  the free movement of goods, services, finance and  people.

The failure to control the banks and their ilk is  a direct consequence of globalism.  The political elites in the developed world have been  driven to not interfere  with the major players in finance by ideology,  self-interest (think of all the cosy post-politics sinecures  in private business  senior politicians acquire) and  fear  (they are terrified that if the banks are not pandered to economic catastrophe will follow). To those bars to  sane financial policies can be added  the interference of supranational  bodies  such as the EU. The existence of such bodies has meant  that even if national governments  had wished to behave responsibly by restraining the bankers’ excesses, they could not have done so because it would have been judged to be anti-competitive by a supra-national body such as the EU competition Commission.

The upshot of this development was frighteningly reckless finance industry business models based on selling mortgages to those who could not possible afford to service them, the development of exotic derivatives such as Collateralised Debt Obligations and Credit Default Swaps and the relentless gearing up of their debt to deposits ratio. This last practice resulted in even supposedly  staid financial institutions such as British building societies getting  into serious trouble  because they became dependent on constant and massive recourse to short term wholesale borrowing , something which froze once the financial panic of began in earnest in 2008.

If banking had remained primarily a national matter, as it was until the late 1980s before the sudden explosion of computers and the embrace of laissez faire economics ,  the damage caused would have been minor compared to what has occurred  even if banks had been allowed to engage in the unsafe practices described in the previous paragraph.  There would have been both far less scope for credit expansion and,  where bank  failures  occurred, they would have almost certainly happened sooner than they did under a globalised system because there would be far fewer  places for a bank in trouble to go to try to borrow to put off the evil day of insolvency. Most  importantly, the  national  financial institutions would have been smaller  and  less able to cause mortal damage to the national economy and would not have had the potential to undermine the international financial system.  In addition, if banking is kept within national boundaries it can be much more readily supervised. Once  it expands beyond a national single jurisdiction, as it does with the EU,  meaningful government supervision and control becomes utterly  impossible.

6. The developing world

Those are the ills of globalisation from the standpoint of the developed world.  But the developing world and the remnants of undeveloped and still undeveloping world are not left unscathed by globalisation.  The developing world experiences an aggregate increase in wealth as it takes manufacturing and service industries from the developed world and improves its infrastructure. But these improvements come at great human cost.  Traditional ways of living are disrupted. Vast numbers flood from the countryside to the towns where they live and, if they are lucky, work in miserable conditions. (http://www.telegraph.co.uk/news/worldnews/asia/china/8818059/100-million-Chinese-farmers-to-move-to-city-by-end-of-decade.html)

Many  find their material conditions  (but not necessarily their psychological state)  improve, but far more are actively disadvantaged by the changes.  If they remain outside the cities people find their  areas being  denuded of many of the most able and vigorous people who leave for the cities; their land being taken with little or no compensation  for infrastructure projects such as dams, railways and factories and their way of life becoming less and less sustainable.  Those who go to the cities for work find their lives are worse than they were before in terms of the conditions they have to endure and subject to great job insecurity . Even in the more developed of the developing Asian countries, where most of the world’s population now lives, there is  a great chasm between the  haves and the have-nots.

Although offshoring production and opening up their markets to  imports from low-wage economies are  disruptive for the developed world and  potentially dangerous  because it puts  them to an increasing extent in the hands of foreign powers , it also  bound the likes of China and India into a dependent embrace.  As the economies of the developing nations  grow they will increase their domestic demand and the capacity and willingness  to satisfy it which  will make them less dependent  on international markets. But that is a fair way in the future.  At present the developing world  is reliant to a very heavy extent on exporting to the developed world.

Countries such as China are also massive  holders of sovereign debt of Western countries, especially of the USA. These  two things mean that the developing economies  are affected by the present depression (let us give it its proper name)  in the developed world,   which is reducing demand for the products of the developing world and,   in the case of countries with large sovereign debt holdings, at risk of losing vast amounts of money.   It is also by no means clear that the financial systems of the developing nations are sound, even if they have not suffered from the same ills as the developed world’s financial  sector.  For example, China is constantly having to patch up bankrupt [projects and organisations (http://www.telegraph.co.uk/finance/china-business/8821094/Chinas-debt-spree-returns-to-haunt.html).

7. The undeveloping world

The part of the world which is not seriously  industrialising also suffers from the destruction of traditional ways of life with nothing adequate replacing them.   Again there has been a flight from the countryside to towns and cities, although in this instance it has not resulted in large-scale  industrial or even substantial  commercial development.   The only winners are those who have tapped into  the funds controlled by the elite who dispense the vast amounts of foreign Aid and the income from foreign companies for mineral rights  to those they favour, whether that be through the award of government jobs or  through straightforward corruption.

Many have been displaced by the demands of foreign countries, especially those extracting raw materials.  Countries have abandoned their traditional agriculture and turned to farming to produce food and flowers for the developed world.  A growing practice is for countries in the developing world, especially China, to buy or lease  large amounts of land in undeveloped countries to produce food for the country which has purchased the land.  It is a kind of  imperialism,  but imperialism without any sense of moral obligation to the ruled.

All of these practices mean that much of the undeveloped world, primarily black Africa, live their lives in conditions which range from abject poverty  to perpetual civil war.  Although I would never pretend that living under colonial rule is unreservedly palatable,  it can bring order and  where the colonial power develops a sense of moral obligation to those it rules, as happened with British officialdom in the final century of the Empire,  it can prevent  serious abuses.   What most of these countries currently have is the worst of all worlds,  deeply corrupt native elites  who sell their countries to the highest bidder, whether that selling being in the guise of gaining aid or commerce, and foreigners exploiting their people and land. There is no check  on abuse.

8. Supra-national  politics

There is a special subset of internationalism, the advanced supra-national body  comprised of nation states which has the nature of a federal government even if it does not have that formal structure.      The EU is the only organisation  which comes close to meeting  that description at present ,but it provides a warning of how such groupings can display the ill-effects of globalism together with some novel features of their  own.

Member states  of the EU have to allow unrestricted  migration within the EU (to be pedantic, within the European Economic Area which includes the likes of Norway and Switzerland as well as the EU) and accept the loss of other great swathes of sovereignty  ranging from  the economic (competition, the making of trade treaties) to the social  (the conditions of work, health and safety).

Most dramatically for the world in general,  17 of the 27 EU states have signed themselves up to the Euro. This  was a criminally reckless enterprise because it married massively disparate economies such as the German and Greek without creating a central executive with the powers of a nation state.  This meant that the controlling and guiding body for the Euro, the European Central Bank, was unable to do  such essential things for a supra-national currency as determine tax regimes throughout the Euro area and move money from the richer to the poorer Euro members .   These errors were compounded by  the failure to implement what  powers existed to impose financial discipline on the Euro members such as  the restriction on the size of  member states budget deficit.  Unsurprisingly,  the Euro eventually ran up against reality and for the past eighteen months the currency’s situation  has looked ever more dire as Greece, then Portugal, Spain and Italy looked candidates for a default as they found it more and more expensive to borrow  on the international markets to cover their budget deficits  and service their national debts, something exacerbated as their  tax bases shrunk during the depression .   In October 2011 the poison looks as though it might even encompass France and Germany.

The ill consequences of the formation of the Euro stretch  far beyond its members.  The constant delay in coming to a conclusion as to what should be done to deal with the Euro crisis, whether that be the wholesale or partial break-up of the Euro or a  decision for the Eurozone to go for full fiscal integration including massive movements of money from the rich members to the poor (the only thing which might rescue the Euro), has created uncertainly throughout  the world and has  significantly worsened an already dire world economic situation.

The Euro crisis has  also sucked in countries from outside the Eurozone to help fund the vast sums needed to bail out the Republic of Ireland and Greece.  This affects the  non-Euro members within the EU and those  from outside the EU who are liable to provide IMF loans.  Countries such as the UK have had to pay  both towards the EU stabilisation fund and the IMF loans.

The lessons from the EU (so far) are that far are that such supra-national bodies amplify the general problems of globalism, especially the loss of democratic control, and add the joker of grand  follies such as the Euro which have massive effects beyond  the supra-national body.

9. Just another outbreak of an old  disease

Globalisation should not be seen as a completely new phenomenon,  although its modern extent and scale  is novel, not least because of the ceaseless march of digital technology and the encouragement, or at least toleration, by Western elites of mass movements of people from the poor to the rich world .   From an historical perspective it is simply the latest example of  the laissez faire  economic ideology capturing  elites and becoming the dominant ideology.

Laissez faire economics has its roots in the late 18th Century when Adam Smith made himself its John the Baptist with his Wealth of Nations (The Invisible Hand playing the role of God’s avatar).   In comparison with those who became his disciples in the  following century,  Smith  was responsible and restrained,  acknowledging that there  were things such as the provision of roads which only the state could undertake and economic areas such as armaments which should as a matter of national prudence be kept in public hands.   His followers such as Richard Cobden, John Bright and David Ricardo In the 19th century knew no such restraint and wanted little if any state interference in the economy at home or abroad.

The consequence was that Britain was tied to the idea of free trade  from the 1840s until the First World War intervened in 1914. During that time the rest of the then advanced world  practised protectionism while Britain outside of the Empire did not.  This resulted in Britain’s dominant economic position in the world in 1850 deteriorating  badly by 1914, with the GDP  of the USA and Germany then  exceeding that of Britain. The years 1840-1914 were a period of great economic  instability in Britain with frequent booms and bust, frequent bubbles, bank failures  and great damage being done  to Britain’s self-sufficiency, most particularly in food.  It was also a period when British industry became deficient in many of the new major industries such as chemicals, despite having been leaders in the early days of those industries.   This was  the outcome of an economy which was allowed to evolve without any state guidance or initiative.  Come  war in 1914 and Britain found itself  dangerously dependent on  imports of not only food  but other vital materials and products, a dependency made  all the more problematic with the development by Germany of efficient submarines to prey upon boats bring the imports to Britain.

Nonetheless, the period  1850-1914 saw a very considerable increase in global transactions and movements of peoples.  This was a consequence of the  development of the railways , the steamship, the Telegraph  and vastly improved roads and the existence of the  various European  empires  (including the Russian) which allowed much free movement of people and goods within the bounds of each empire.

But although this was a form of globalism,  its pernicious social and economic effects were greatly  ameliorated  (at least for the developed world)  by the fact that so much of the world was controlled by the European empires.  The mass movement of peoples occurred  within the colonial possessions not between the colonial possessions and the colonial power’s homeland.   Politics was still contained within the nation state.  The developed countries, with the exception of Britain,   still thought  their national advantage was to be gained by protectionist measures.  Even Britain did not completely buy into the idea of free trade  because legal preference was given to trade within the Empire

A World war and the Great Depression  killed off the laissez faire creed as the elite British and British imperial ideology  for 50 years.  The European Empires were dismembered  and the Soviet and Chinese communist blocs created .   Protectionism ruled (even the European Economic Community, as the EU was then,  did not  greatly change the picture  because it was small to begin with and the radical measures such as the single market  were for the future).

After the second World War it was, for  the developed world,  an era of great stability.   There was no war in Europe worthy of the name, the nearest approaches to it were  several uprisings against Communist rule;  such serious wars as the West became involved in – most notably Korea and Vietnam – were either wars of  choice not necessity  or native uprisings at the fag-end of European colonialism like the British fight against communists in Malaya and  the French retreat  from Indo-China and Algeria.

In this protectionist world  the economies of the United States and Europe  did not shrink or stagnate. Just as the economies of those which practised protectionism in the nineteenth century  grew,  so did  those of the developed world grow between 1945 and 1980. It is a myth that only laissez faire economic policies produce strong growth.  Britain was an exceptionally  interesting case because the Attlee government of 1945-51 undertook arguably the most radical programme of nationalisation ever seen outside of the Communist world and British governments of all formal colours followed what were essentially social democratic policies domestically until the election of Thatcher in 1979

Most tellingly, after 1945 there was no general serious economic crisis until the early seventies when  two extraordinary events occurred. In 1971  the USA unilaterally collapsed the Bretton Woods system which  imposed discipline on the world’s freely exchangeable currencies by   pegging the dollar to the gold standard and the other currencies to the dollar at fixed prices. This  introduced the destabilising volatility of floating exchange rates into the world’s economic system. In  1973 the  oil producers’ cartel OPEC  doubled  oil prices. But even these  considerable shocks  did not knock the world economy over ; they merely made  it stagger.  It took the advent of Thatcher and the American neocons  to drive the economies of the developed world into a world of ever increasing make-believe where their politicians kept on saying how things were getting economically better, that countries such as Britain could become post-industrial and live off service industries alone.  The insanity of that mentality can be starkly seen now as unemployment has remained stubbornly high  in the developed world, something exacerbated by the present depression but not  created by it.

10. Unemployment as a barometer of an economic system

Unemployment is arguably the prime barometer of the social utility of an economic system. It was very low in Britain until the early seventies running along at 2-3%  (http://www.parliament.uk/documents/commons/lib/research/rp99/rp99-111.pdf). Even at the end of the 1970s its was low compared with what it has been since globalisation took off. In 1979 the Independent Labour Organisation (ILO) count  of those seeking work  without necessarily being signed on for unemployment pay  was 1,528,000 and the figure for those signed on for unemployment pay was 1,064,000. (http://www.york.ac.uk/res/ukhr/ukhr0405/tables&figures/04%20004.pdf)

In Britain in 2011 the official ILO  survey figure in August was 2,566,000 (8.1% of all economically active).  Those actually signing on for unemployment benefit totalled 1,597,200. (http://www.parliament.uk/topics/Unemployment.htm).  However, that is not the true figure because there  were 2.58 million people claiming long-term sickness benefit  (Incapacity Benefit and its 2008 successor Employment Support allowance)   in February 2011.  (Perhaps even more staggering there were 5.8 million working age benefit claimants).  (http://research.dwp.gov.uk/asd/index.php?page=statistical_summaries).

In 1979 the long-term sick figure stood at  720,000  (http://www.dailymail.co.uk/news/article-1042141/60-long-term-benefits-claimants-work-admits-minister.html). It stretches credulity beyond breaking point that there are there are some 1.8 million more people of working age who are too ill to work indefinitely in 2011 than 1979.  The reality is that much of  the 2.58 million will be disguised unemployment.

During the 1980s the Thatcher Governments adopted a policy of moving people off the ever growing unemployment register (those claiming unemployment benefit peaked at over 3 million in 1986) and onto the long-term sick count, where they often remained more or less permanently because much of the unemployment was structural (a consequence of deliberately destroying much of Britain’s extractive and manufacturing industry)  and the unemployed simply had no jobs to go to.  The policy was  carried on by  the Tory and Labour Governments which followed Thatcher.

How much of the 2.58 million now on the long-term sick register are really just unemployed?  As it is only those of working age (16-65) who are part of the statistics, it is difficult to see why the real figure would not be similar to that of 1979.  The population has grown since 1979 by a few million so let us say that 1 million are the  genuinely long-term sick.  Add the other 1.58 million to the ILO figure for 2011 and the unemployed rises to over 4 million. To that figure can be added  those who now stay on at school until they are 18 (in 1979 far fewer did) and the vast increase of university students (from around 13% in 1980 http://www.le.ac.uk/economics/to20/greenaway03.pdf to around 40%  in 2011 http://www.telegraph.co.uk/news/uknews/1584495/Labour-sticks-to-50-per-cent-university-target.html). It is difficult to give exact figures here but it would probably push the true figure of unemployed in the UK in 2011 up to around the 5 million mark.

As an example of how globalisation brings instability, both economic and social,  Britain is probably the prime example among developed nations.  All it has brought to Britain is seemingly permanent mass unemployment.

It would be argued by the Thatcherites and their ilk that the high level of employment in the post-war period was due to overmanning, especially in the nationalised industries.   That has some truth in it, although the extent of the overmanning is exaggerated by modern neo-liberals.  It is also a question of what service is given. Much of the supposed overmanning of the nationalised industries was really a matter of giving a superior service to that which is given by the nationalised industries after they were privatised  and manning levels drastically reduced.

But even if it is allowed that there was substantial overmanning  in the post-war period that does not necessarily mean it was not of social and economic benefit. What needs to be considered is the overall picture of society where such overmanning exists.  It ensures that  most people in a society are employed. That  creates social stability by giving people a routine in their lives, by ensuring that people are bound into society , by giving them a sense of purpose and most importantly a feeling of security so they can plan for the future, something particularly important when it comes to starting and raising a family.

That was essentially the situation in the period 1945-1979. People felt secure in their jobs, housing was cheap and plentiful, not least because the massive council housing programme of the  1950s and 1960s, the NHS had been created  and  perhaps most importantly a single adult wage was enough to support a family.

Compare that with what we have today.  People in Britain are increasingly insecure. If they have jobs they fear that they will lose them. If they keep their jobs there are pay freezes or wage reductions. The unemployed seek desperately for jobs – any jobs – but find they are competing with dozens or even hundreds of people for unskilled work. It is difficult in 2011  to support a family on a single adult average wage. Housing,  both bought and privately rented , has become obscenely  expensive  – If the average house price in 2011 was  the same in real terms as the average house price in 1955 it would be less than £40,000 (http://livinginamadhouse.wordpress.com/2010/10/24/the-vicious-poison-in-the-british-economy-is-the-outlandish-cost-of-housing/).  It is a recipe for rabid insecurity and the fuel for renewed class hatred and racial and  ethnic strife.

The dirtiest secret of all in this matter of overmanning under the social democratic regime of the post-war years  or the supposedly more efficient workings of laissez faire since 1980, is that the British government has developed a universal subsidy for employers. It is tax credits which are paid to people in work on low pay (the definition of low pay has been somewhat elastic being up to £60,000 until recently but it is still at £41,000 –  http://www.hmrc.gov.uk/taxcredits/start/who-qualifies/what-are-taxcredits.htm#8).   Hence, the taxpayer is in effect  paying employers to take on labour, rather than, as used to be the case, the taxpayer paying the employee by funding more generously manned  nationalised industries than were strictly required.

The true cost of unemployment  is rarely calculated.  For example, where structural unemployment occurs, as with the coal mining closures in Britain, large numbers of people are  lost to work for many years, not infrequently for life. The cost to the taxpayer in maintaining long-term unemployment is immense, as is the psychological cost to the unemployed individuals and their families.  Even where those made redundant get new jobs they are rarely as well paid as those which have gone. Often precious skills are lost to the country when an engineering company closes or offshores its production. These factors  are  rarely if ever built into cost-benefit analysis of the loss of employment.  British government contracts are a good example. They are frequently awarded simply on the basis of who offers the lowest price. A recent example of this is the awarding of a multi-billion pound contract to Siemens rather than the British-based Bombardier for trains for the Thames Link.  (http://www.bbc.co.uk/news/uk-england-derbyshire-14019992).  If skilled people cannot find appropriate work in Britain, they go abroad.

There is also a general economic benefit from having people in jobs, drawing regular wages and feeling secure: it helps maintain aggregate demand because people  both more confident about spending and , because the money and the spending appetite is spread throughout the population the rate of circulation of money is kept high which stimulates economic activity.

11. Capitalism in a protected domestic economy

If it is not  capitalism but free trade  and the mass movement of people across national borders which causes instability what is the solution?  WE could remove those practices and societies, but then what?

If  capitalism was  allowed free rein in the domestic economy  but free trade and mass immigration were not, would that be the ideal regime?   Capitalism in the domestic market  would certainly have the capacity for damage if there was no state support for the poor, the sick, the disabled  and the old in the form of ensuring that there was sufficient  housing,  healthcare , educational opportunity, pensions for the old  and support in times of unemployment and  illness within the reach of the poor.

There are also things which should remain in public hand as a matter of  policy either because it would dangerous for them to be  in private hands  (the armed forces, police, justice) or because they can only operate  efficiently as a monopoly  (the post office) or are a natural monopoly (roads, railways).

Perhaps most contentiously there is a strong case for nationalising banks,  both because of their potential  to wreak havoc in an economy and because their nationalisation would return control over the money supply, as far as it can ever be controlled  to national governments.  Nationalised banks should also make a handsome profit to for the taxpayer because it would  next to impossible not to regularly make large profits  if they  eschewed the reckless practices of the past generation. (There would of course have to be very strong  constitutional bars to politicians debauching the currency.)

But even if banks were not nationalised, they would be much easier to control within an economy operating within national borders  with national politicians committed to the idea of nations not internationalism. For example, national governments could ban any financial instrument which created confusion between lender and borrower, creditor and debtor.  They could cap the amount of sovereign debt held by a bank.  They could insist upon minimum deposits and maximum multipliers of wages for mortgages.  Restrictions on lending to foreign borrowers could be introduced.

The existing banks are of course operating internationally and it might be thought that all they would have to do is  shift their entire operations out of any national territory which tried to control them.   There are two good reasons why they would not want to do that. First, banks may be international in their trading, but often they still have much or a majority of their  business in a particular country, normally the country of their origin. That would make it difficult to shift their operations because they would have to be willing to  kiss goodbye to a large part of their business if the  national government of a country where they had much of their business was   serious about controlling them.  Any national government could simply say, all right you won’t play ball with us, we shall not let you trade in this country.. The second reason is the fact that banks rely on governments underwriting them to a large degree both in terms of guaranteeing deposits and by  Central Banks acting as lenders of the last resort.  There are not that many countries which can safely offer such guarantees.  That would make the threat of leaving somewhat hollow.

Provided that all  things are done – welfare, nationalisation, protection, control of the banks  –   allowing free enterprise to generally organise most  things economically within the nation state is the best way of proceeding.  If a general  protection for strategically important parts of the economy such as farming and energy production are put in place, a judicious use of quotas  for a wide range of necessary goods  implemented  (says, 75% of all necessary goods to be home produced)  and mass immigration is outlawed,  there is little harm  that capitalism (or private enterprise if you prefer) can do .On the credit side of the ledger, there is  undoubted great utility in  having a self-organising  part of the economic system which satisfies human ambition and efficiently delivers goods and services where the ability to pay is either not an issue or the good or service is not a necessity.  This  would cover  the large majority of economic activities,  because much of the welfare provision would come in the form of money to the claimant and this would then be spent to purchase food, clothes and so on provided by private enterprise.  There is also an argument that it is healthy for a society to have large numbers of people who are capable of taking charge, making their own decisions. One of the problems the countries of the Soviet bloc had after the USSR split and  the communism fell was the lack of people who were capable of taking charge, of creating new businesses or even doing jobs which required initiative.

The alternative to capitalism is states running command economies.  These do not have a happy record. Much better to allow a properly  controlled capitalism to do most of the job of meeting most human needs.

Will the elites of  developed world wake up and see that globalism is the problem? Not from choice because they have nailed their colours to the internationalist banner. But fear of what is happening  in the world they have created – growing class feeling, racial  and ethnic strife and increasing material deprivation and insecurity  – may drive them to bite the bullet. Let us hope that happens before it is too late.

See also

http://livinginamadhouse.wordpress.com/2011/05/23/the-wages-of-globalism/

http://livinginamadhouse.wordpress.com/2011/01/10/a-sane-alternative-to-globalism/

http://livinginamadhouse.wordpress.com/2011/03/13/market-economies-and-the-illusion-of-choice/

http://livinginamadhouse.wordpress.com/2011/03/03/does-the-welfare-state-corrupt/

http://livinginamadhouse.wordpress.com/2011/02/14/public-service-and-private-enterprise-what-do-we-mean-by-efficiency/

http://livinginamadhouse.wordpress.com/2011/09/21/another-day-another-lethal-financial-derivative/

http://livinginamadhouse.wordpress.com/2011/01/30/the-consequences-of-an-end-to-mass-immigration/

http://livinginamadhouse.wordpress.com/2010/12/27/does-free-trade-deliver-greater-prosperity-the-lessons-of-economic-history/

Have Liam Fox and Adam Werritty committed crimes?

The Labour MP John Mann has asked the Metropolitan police to investigate Andrew Werritty for possible fraud arising from his misrepresentation of himself as special advisor to Liam Fox.  (http://www.telegraph.co.uk/news/politics/conservative/8829803/Liam-Fox-affair-Adam-Werritty-facing-fraud-investigation-by-police.html).

There are grounds to investigate not only  Werritty but Fox himself. On Friday 14 October I circulated this letter to amongst the mainstream British media:

Sir,

There is an unresolved question about Liam Fox and Adam Werritty: have criminal offences been committed?

Werritty has gone about issuing business cards which represent him as an adviser to Liam Fox. Those who had dealings with him have put on record that they believed he was Liam Fox’s special adviser because of the way he represented himself.

If such false representations have resulted in Werritty gaining money or benefits in kind that would constitute the offence of obtaining property by deception contrary to section 15 of the Theft Act 1968 (False Pretences in old money).

If Fox has known this was happening and permitted it, then he would be guilty of the criminal offences of either being an accessory or engaged in a conspiracy to obtain property by deception.

Even if no material benefit has been gained Fox and Werritty could well be guilty of breaching the Official Secrets Act by divulging information covered by the Act to those not entitled to receive it. Indeed, if Fox has supplied such information to Werrity (who has no official standing) he could be guilty.

Yours sincerely,

Robert Henderson

I have since written to John Mann urging him to broaden his call for criminal investigation:

16 10 2011

Dear Mr Mann,

I see you have urged the Met Police to investigate Werritty. Quite right. However, there are good grounds for investigating Fox as well, both for possible conspiracy to defraud and breaches of the Official Secrets Act.

I enclose below a letter I circulated to the media on Friday. It gives the reasons why there are prima facie grounds for suspecting criminal offences have been committed.

If I can be of any further help, please let me know.

Yours sincerely,

Robert Henderson

Labour re-writes the past – their economic management

The Labour hierarchy has worked out its narrative on the economic mess they created. It runs like this:  NuLabour in power may have made some mistakes,  but these were minor and apparent only with hindsight, while  the real culprit is the global economy in general and the USA’s obsession with sub-prime mortgages in particular. This is not only a grotesque lie but a stupid one because it can be  readily exposed.

It is true that Britain could not have avoided the global recession entirely, but the Labour Government could have massively mitigated our present plight by exercising restraint in public spending  and responsible regulation of the banks and their ilk.

The  reckless spending is easily demonstrated:

Labour ran a surplus for each of their  first four years of government:

1998       £    703 millions

1999      £11,976 millions

2000       £16,697 millions

2001       £ 8,426 millions

Total  1998 – 2001  surplus of £37,802 millions

Labour ran a deficit for  the rest of their time in government:

2002    £19,046  millions

2003    £34,004  millions

2004     £36,797  millions

2005     £41,355  millions

2006     £30,755  millions

2007     £33,718  millions

2008     £68,003  millions

Total 2002 – 2008   Deficit of £263,678  millions

2009   £152,289 millions

2010   £148,774  millions

Total  2009 -2010   Deficit of £301,063 millions

Net total debt accumulated  in the period 1998 – 2008 £225,876

Net total debt  accumulated in the period 1998-2010 £526,339 millions

Figures taken from http://www.guardian.co.uk/news/datablog/2010/oct/18/deficit-debt-government-borrowing-data.

The figures tell their own dramatic story:  the Blair and Brown governments continued spending recklessly throughout their period in office (1997-2010).  They achieved small surpluses in the first four years because of the favourable conditions created by the prudent  Ken Clarke budgets  prior to the financial year 1997/98 and Blair’s commitment to sticking to the Major Government’s spending plans for their first two years in office.

From 2002 to 2008 Blair and Brown ran substantial deficits despite the economy  being in a boom. When Lehmann Bros failed in September 2008 Labour had increased the national debt by £225,876. That in itself should have told them  (and the other major political parties)  that the spending was reckless.  A prudent government  – as Gordon Brown constantly claimed NuLabour was – should have been paying down public debt  during  the boom so that when the inevitable downturn  came there would have be the opportunity to maintain or increase public spending to  keep up aggregate demand.

The exact dimension of the recession/depression which followed the collapse of Lehmann Bros in 2008 may have been  impossible to predict, but the persistent deficits  meant that in any downturn the UK public deficit would either have  to rise significantly or public spending would have to be cut substantially.

Because Blair and Brown spectacularly failed to satisfy the paying down of debt in good times part of the Keynsian bargain meant there was not only no  room to increase public spending when the downturn came, but  even  maintaining spending at the level it had been during the  boom in the downturn was impossible.

Brown attempted to disguise what was happening by creating a distinction between increasing government spending  on capital projects (good) and the funding of the day-to-day running of public bodies (bad).  Capital project spending was deemed to be allowable even if it placed the national finances in deficit but day-to-day expenditure  was not allowed to add to the deficit.   This was a bogus  distinction because there is no objective way that  expenditure can be cleanly divided between the two types of expenditure. For example, if the hospital capacity is increased by new capital investment it means eventually that extra costs will arise from the day-to-day running of the new hospitals.  It is also a  value judgement to say that capital expenditure is more valuable than day-to-day expenditure or that capital expenditure is justified because it produces new public projects. In the end debt is  debt however it is generated.

Brown’s formula  meant  there was  very weak restriction on the growth of capital projects. To obfuscate matters further, Brown  produced a formula whereby the books only had to balance  over periods of years, periods which he frequently changed as the figures failed to show what he wanted.

But the figures for government spending and  borrowing do not tell the whole story.  Under Blair’s control the Labour Party became if anything more committed to the  idea that free enterprise is best than the Tories.  This lead them to greatly increase the  use  of the Tory created  Public Private Partnership (PPP) and   Public Finance Initiative (PFI)  schemes.

PPP  commonly involves the taxpayer and private companies sharing the cost of public projects  (with the private contractors commonly being remunerated by drawing an income from  providing services for which the public pays  over many years) while  PFI  schemes required the contractors to provide the full initial cost of a public project which is  then paid back with interest  out of taxes over periods of time as long as 35 years. ( PFI contracts normally  result in the private contractor owning the capital product of the contract, for example, a new school or hospital, then leasing it back to the public body who pays for it over a long period, during which time the private contractor normally has a further contractual  money spinner such as maintain the school or hospital for which again the taxpayer pays.  )

The honest way for governments to finance projects is to borrow the money (which they can do much more cheaply than any private business) and add the loan to the national debt. Brown kept most of the PPP/PFI expenditure off the books by likening it to a mortgage which was only paid off gradually. He argued from this that it was unreasonable to add the entire cost of the projects onto the national debt  and that only the annual cost should be added each year to the public accounts (http://news.bbc.co.uk/1/hi/uk_politics/8112758.stm). The problem with this was that it severely disguised the full extent of public expenditure.

Exactly how much public debt has been run up through PFI and PPP financed projects is uncertain because of the length of the contracts which commonly have renegotiation clauses at various points built into them and the habit PPP and PFI contractors have of presenting public bodies with demands for more favourable terms, failing the granting of which  they will  walk away from the contract.   But if exact figures cannot be arrived at ball park figures can.  In 2010 the NHS Health Direct website carried an article which estimated that the cost of PFI contracts entered into since Labour came to power in 1997 was probably in the region of £300 billion (http://www.healthdirect.co.uk/2010/02/how-labour-government-squanders-300-billions-with-pfi-schemes-2.html).  To put that in context,  the National Debt when Labour came to power, which had been accumulated over 300 years,  was £352 billion (http://www.debtbombshell.com/history-of-national-debt.htm).  The large majority of the PFI/PPP  cost s do  not  figure in the official  National Debt.

The failure of the  Blair and Brown governments to behave sensibly and honestly during the boom years resulted,  after Lehmann’s collapse in 2008, in  a very rapid deterioration of the public finances  with a deficit of  £68 billion in 2008 (in itself a frightening figure) turning into one of £152 billion a year later. Amongst the Government’s responses to the deteriorating financial situation was, unbelievably you may think, to  keep pushing new  PFI projects forward  on the grounds that this would help keep aggregate demand up. The problem was that credit suddenly became much more expensive so the cost of the  that the PFI contracts rose. (http://www.publications.parliament.uk/pa/cm201011/cmselect/cmpubacc/553/553.pdf). However,  because   PFI costs were kept largely off the books Enron-style, this  suited the Brown Government because it meant that expenditure could be kept up without it being added to the official  National Debt.

The failure of  regulation

The over spending and dishonest accounting was dangerous and damaging in itself, but it was made unreservedly toxic by the failure of Blair and Brown to control both the growth in credit and prevent the development use of ever more exotic and  removed from reality  financial vehicles of the derivatives variety such as Collateralised Debt Obligations (CDO)  and  Credit Default Swaps (CDS). – http://livinginamadhouse.wordpress.com/2011/09/21/another-day-another-lethal-financial-derivative/.

Margaret Thatcher abolished credit controls in the 1980s.  Blair and Brown not only failed to  reinstate them,  but positively celebrated the surging  growth in credit from credits cards, bank loans and,  most of all, mortgages.  Banks showered their customers  with offers of credit cards and bank loans; mortgage providers allowed multiples of earnings  of four, five and  even six times earnings and 100% mortgages .  In the last few years  before Lehmann’s collapse in 2008 mortgage providers were offering more than the value of the property  with 105%, 110% and finally 125% mortgages  in the manic belief that house prices would continue rapidly upwards  forever  and wipe out the  negative equity  in the property on which they had loaned more than the property was currently worth.

Just to make the debt pie really sticky, those granting mortgages and other credit  allowed the borrowers to self-certify their earnings and  applications for credit cards and bank loans were passed without any meaningful check on what were the borrowers’  financial circumstances. This resulted in a good deal of  mortgage fraud, people running up massive credit card debts using ten, twenty or even more cards and large numbers of people (especially those who bought in the last year or two of the housing bubble)  with mortgages far too large for them to service comfortably even when house prices were rising and  re-mortgaging at a reasonable rate  easy, mortgages which became utterly beyond them when the crash came.

Blair and Brown added to the domestic  economic  debt and house inflation jubilee by allowing immigration to get out of hand.  In their 13 years in Government Labour allowed net migration into Britain estimated at  3 million (http://www.migrationwatchuk.org/briefingPaper/document/144).  This massive influx coupled with the ease of mortgages (which foreigners could obtain as readily as native Britons)  poured much  inflationary oil on the housing price waters  and almost certainly substantially drove up credit card debt as well.

If Blair and Brown had done no more than introduce credit controls which restricted mortgages by insisting on a reasonable deposit – say fifteen  per cent – allowed  a mortgage of no more than three times salary,  banned self-certification of earnings and insisted on proper verification of the borrower’s general  financial circumstances,   much of the debt poison would have been avoided. Even with massive amounts of immigration, house prices would have remained lower because there was less credit chasing them. Lower house prices would have reduced the amount of credit generated by people taking out second mortgages to spend on things other than their property and made people less inclined to take out other forms of debt because they would not have felt  as giddily rich  as they did in the over-heated house price  years running up to 2008.

To the vast indebtedness created by New Labour spending must be added the financial fall out of the banking crisis. This  was the consequence of criminally lax regulation.   The Blair/Brown Governments started the process of pumping vast amounts of public money into the banks with the effective failure of Northern Rock in September 2007, its nationalisation in 2008 and the partial nationalisation in 2008 of Royal  Bank of Scotland and what became the Lloyds Group after Lloyds TSB had its arm twisted by the Government to take over Halifax Bank of Scotland.  There were also been one or two smaller interventions such as  those involving the Dunfermline Building Society and  the Bradford and Bingley (a building society converted into a bank).   In theory, all the money used to rescue these financial businesses will be recovered eventually when the  government sells its stake in the banks. However, the “in theory” is a very live issue because if the shares were sold now it would be at a  very substantial loss and there is no prospect of the shares doing anything but remain stagnant at bets for the foreseeable future because of the continuing  global financial woes in general and the plight of the Euro in particular.

The upshot of all this state intervention to support  Britain’s financial system  is that the official National Debt (which does not include most the PFI/PPP expenditure)  broke the £1 trillion mark in January 2011. It will continue to  rise rapidly even under the Coalition’s plans to  eliminate the structural deficit, that is, the deficit which exists even when the economy is working flat out,  because of the on-going massive UK public spending deficits   which will be around for a few years (http://uk.finance.yahoo.com/news/Does-national-debt-matter-yahoofinanceuk-1107255620.html).

That is what the Blair/ Brown Governments are responsible for. Not only the havoc they have wrought in office  but the mess they have left behind.

What could the Blair/Brown Governments have done?

Within the constraints of  the various treaties affecting commerce  Britain was signed up to  by 1997 – primarily the EU and WTO Treaties –  what might a prudent government have done  during  13 years  in office?  They could have instigated credit controls on all forms of  lending from mortgages to credit cards; insisted that the banks had much higher levels of liquid reserves;  banned all financial instruments which  extended the question of ownership and liability beyond the  original contracting parties, forced the banks  to run their  retail and investment activities as separate companies and then  offered no government guarantees or other  support to the investment companies  and limited their exposure to other countries’ sovereign debt.

These activities should all have been possible even though we are  within the EU and signed up to the WTO Treaties because  what competition law internationally requires at present is that all subscribers to a treaty are treated equally within the various national jurisdictions covered by the treaty.   However, we all know how perverse and dishonest the application of EU law has been and it is possible that some or all of the measures could have been ruled illegal by Brussels. In that case the Gordian Knot  could and should have been cut by Britain’s withdrawal from the EU.

What has Labour to say about this catastrophic management of the national finances?

Labour  are shameless. At the 2011 Labour Party Conference the shadow chancellor Ed Ball, the man with a good claim to have been Gordon Brown’s closest supporter and aide during Brown’s period as Chancellor,  blithely shrugged off Labour’s grotesque mismanagement of the economy with this:

“Don’t let anyone tell you that Labour in government was profligate with public money – when we went into the crisis with lower national debt than we inherited in 1997 and lower than America, France, Germany and Japan.”  (http://www.telegraph.co.uk/news/politics/labour/8790476/Labour-Party-Conference-2011-Ed-Balls-refuses-to-apologise-over-Labours-economic-record.html).

It is true that the official national debt represented as a proportion of UK GDP was lower in 2008 than 1997  (36% as against 42% in 1997  see http://tinyurl.com/GDP1997-2010). The first thing to note is that the  official national debt in 2008 was a fudged figure which excluded most of the PPP/PFI costs. If they had been included,  it is probable that the 2008 official percentage figure would have exceed the 1997 figure

But  the absolute amount of money also  matters,   both because there is a greater amount to service(the ease of which is subject to general  economic conditions at home and abroad)  and because if a recession shrinks the economy the percentage shoots  up (By  2010 the National Debt  had risen to from 36% to 52% of GDP, partly due to the growing annual public deficit but also because the economy shrank  by over 5% (http://www.economist.com/node/15770872).

Balls continued in his Conference speech with “And don’t let anyone say it was public spending on public services here in Britain which caused the global financial crisis.”.   Do not fret Mr Balls, no one has suggested that you and your friends were powerful enough to do that.  The point is you were in a position to mitigate its effects.

Just in case anyone had the bad taste to keep on pointing out NuLabour’s disastrous folly (that’s being kind)) Balls  urge the electorate to adopt a collective amnesia: “For families today – struggling to pay the bills, worrying about their jobs – being told about the great things Labour did in government isn’t much comfort… it doesn’t pay the bills, help get a job or secure the pension.”  So there you have it, the Blair and Brown years were glorious and the fact that Britons are becoming rapidly more insecure and poorer nothing to do with Balls or any of his Brownite cronies.

Like the Bourbons, the Labour hierarchy has learnt nothing , but unlike them, has  forgotten a great deal of inconvenient facts.  The  extent to which Labour is still living in a fantasy world is their alternative to the Tory deficit cutting plan.  Instead of aiming to eradicating the structural deficit by 2015,  which would produce a projected National Debt of £1.4 trillion (http://business.timesonline.co.uk/tol/business/economics/article7145924.ece), they wish to merely halve it.  This would add many tens of billions more to an already frightening level of public debt. That is the NuLabour mentality in a nutshell:  that of the person buying on the “never never”.

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