Monthly Archives: December 2010

Has “free trade” ever been practised?

Between  1860  and  1914 Britain operated  the  best  approximation  to “free-trade”  the world has seen.  In the period 1840-1870 not only did she by  degrees open her markets to all regardless of  whether   other  countries reciprocated,  but the size of the British state was so tiny that  the  distortions  of government expenditure   and  taxation  were  minuscule compared  with the present day.   But   achieving  the  best  approximation to “free trade”   was not difficult to achieve because no other  country  of any size  has ever seriously attempted  it  for  any length of time. 

For a quarter or a century or so, Britain got away with the ill-effects of being  a  reckless  “free trader”   whilst  other  major  countries remained protectionist to varying degrees. She escaped the consequences for three prime reasons: Britain’s industrial dominance,  long distance transport  of bulk goods remained  cumbersome and expensive  and   the fact that America and Europe were  strangely slow to follow  Britain’s example and industrialise.

 That  all  changed  in the  1870s.  Bulk transport  was  becoming  much easier  and cheaper.  Railways –  ironically more often than not  built with British  capital and technical expertise – had begun  to  have  a considerable   influence  on  the continent and  in  America  and  were beginning  to  snake across Australia and South America.  Perhaps  most importantly  the  age  of the  practical  steamship  and  refrigeration arrived.   Manufactured goods,  food and raw materials could  now  move around  the  world in  volumes which dwarfed anything  which  had  gone before.   British farmers were especially badly hit when  the  Americas and Australasia flooded the British market with food and wool. To these developments,  and arguably in part as a consequence of  them, there was a widespread retreat into a deep protectionism in the  1870s, most notably by the USA and Germany. Britain failed to respond to these developments by guarding her own markets.

 The  period  of  1870-1914 saw the  predictable  results  of  Britain’s quixotic  refusal  to  guard  her markets  when  all  about  her   were assiduously  doing so:  she lost her general  industrial  predominance, well nigh  destroyed  her farmers and failed to  dominate  vital   new industries, such  as the chemical,  which at one time she  had  led  – Britain produced the first synthetic dye (Perkin 1856) and  the  first synthetic plastic  (Parkes  1855).   Two  of  the  most   enthusiastic protectionists, the  USA  and  Germany, became  the  first  to  exceed Britain’s GDP.

Bismarck  summed  up  what had happened in a speech  in  1882  when he said:”I  believe the whole theory of free trade to  be  wrong…England abolished  protection  after she had benefited from it to  the  fullest extent. That  country used to have the  strongest  protective  tariffs until  it became so powerful under their protection that it could  step out of those barriers like a gigantic athlete and challenge the  world. Free  trade  is  the weapon of the strongest nation,  and  England  has become  the  strongest nation in the world owing to  her  capital,  her iron,   her  coal,  and  her  harbours and  owing  to  her  favourable geographically position.  Nevertheless,  she protected herself  against foreign  competition with her exorbitant protective tariffs  until  her industries became so powerful.”

But  even the “free-trade”  Britain practised  was far  from  complete. Government contracts were generally  given to British companies.  Ditto municipal contracts.  Moreover,  there was a strong sense of patriotism in the country which, as with the present  day Japanese,  mitigated the effects of free-trade.  Nor,  of course,   was there a WTO,  EU  or any other body  to  question and interfere  with   the  internal  economic workings  of Britain  such  as taxation,  interest  rates  or  working conditions.

 British  “free trade”  was further complicated by the existence of  the Empire   and  a  widespread  imperial  sentiment  which   created   the opportunity  and the desire to trade with members of the Empire  rather than the rest of the world.  It does not do to over-egg the effects  of this because  British  trade  with  the  world  outside  the   Empire, especially the  USA,  always  remained  strong,   but  it  undoubtedly significantly distorted British trade.

“Free trade” today

 If “free trade” was a gigantic gamble for an industrially, commercially and politically  dominant  Britain in 1850,   it is vastly riskier  for any country now.   Transport even after the arrival of railways and the steamship was still expensive,  slow and cumbersome compared with now. The electric telegraph was the height of sophistication.  Most parts of the  world  could not engage in international trade on their own  terms because  they  were colonies,  under the practical control  of  foreign powers or unindustrialised.

Today physical transport is fast and cheap. In place of  the telegraph, we have the internet.  Many countries have industrialised.  The age  of formal empires is over.

But there is more than political and technological change which makes a difference  between our own time and the last outbreak of “free  trade” mania.   The  “free trade”  being advocated now is doctrinaire  to  the point of idiocy, namely the god of comparative advantage (the idea that each nation  should  concentrate  on those  products  which  are  most profitable  and forget the rest) is to be applied to  everything,  even (in  the EU) to all public contracts,  including those  for  weaponry. Childishly doctrinaire as they were as they played with their  untried intellectual toy, even the most extreme “free traders” in the 1830s and 1840s saw that some parts of the economy could not be reasonably opened to competition  for strategic reasons,   military supplies  being  the prime case.

Let us suppose that we had a perfect “free trade”  world now,   a world in which  there were no tariffs or quotas or embargoes or  “standards” to meet; that all the artificial restraints on trade were removed; that no government subsidized productive employment in any way and all  that remained  to differentiate countries were market decided labour  rates, carriage  costs   and the cost of nonproductive public  works  such  as justice and  the army. What then?

The consequences would be extremely dangerous  for the West. Farmers in the  First  World  would  be on their knees  and   mass  production  of virtually  anything in general demand would  quickly become  impossible because whatever a company’s efficiency,   it simply would not be  able tocompete with labour which  was a tenth or less of the cost  of  its own native  workforce.   All such countries could do is  try  to  make high-value goods.  Moreover, even if the redundant working populations of the First World could find alternative employment, which is dubious, their countries would be left utterly  at the mercy of those who now produced their food and most  of the manufactured goods they consumed.

What do we mean by “Free trade”?

“Free trade”  is frequently  treated as synonymous with   international trade. In principle it does not have to be  restricted to international dealings because  the concept may be applied to any   market,  whether that  be within  a global,  regional,   national  or   even   a  local context.   The United  States  for  example   displays   considerable differences  in  local tax rates between not only  states  but  within localities within a state, and, indeed,  the ultimate aim of the “free trader”  is  to  create a single world  market.   However,   there  are considerable  differences  in  practice between  domestic  markets  and international markets,  not least because the criteria which are deemed to fall within the concept of “free trade” are not identical with those which  are  said  to  be a necessary part of the  concept  of  a  “free market”,  for example,  laws to prevent monopoly are redundant when  it comes to international trade because one country  will either supply or not supply goods and services to other countries and a  country with  a monopoly  of an important good or service can as a matter of fact  only be  persuaded  to  supply   the good or service  against  its  will  by extra-legal  action,   ultimately   force  or  the threat  of   force. Consequently, it  is convenient to treat “free trade” as being economic intercourse  between nation states and that is what I shall do.

What  does  and does not constitute “free”  international  trading?  In times gone by, people would have  pointed to those honest workhorses of restriction:   embargoes,   quotas and tariffs and navigation laws  and not much  else.   But  in  the  modern  world  things  are  much  more complicated   as  we  discover  almost  daily  during   the   seemingly interminable EU squabbling and the GATT rounds.

Some  things   are obviously incompatible with  “free trade”   such  as embargoes  or  state  subsidies,  but what of  different  tax  regimes, welfare provision  or labour  regulations?  Why should they be  excluded from  the  things  which should  not be tolerated in  a   “free  trade” regime?   After all,  a low company tax regime  could be regarded as  a form  of  state subsidy to business and all welfare provision could  be regarded as a subsidy to wages.

But  even  such items are straightforward compared to others.  What  of national  sentiment  which gives a preference to  home  produced  goods regardless of whether they represent the best value when judged  purely by price and quality?  Should  a country be forced to take the cheapest of any particular equivalent good or service,  regardless of the wishes of the people of that country, on the grounds that not to purchase that which gave “best value”   constituted “unfair competition”?  A reductio ad absurdum? Well,  consider the fact that public bodies within the EU which  for  these purposes includes any organisation drawing  part  of their income from public funds) must allow any company within the EU to bid  for  any work put out to contract,  and if the lowest bid  is  not accepted,  the public body risks being fined for a breach of the Single Market rules.

Even more problematic are things  which are simply effects of  economic activity.  Take true dumping,  not the state subsidized export  regimes which often pass for such,  but a simple economic practice to  maximise profit.

True  dumping works like this.  Imagine that a company can  make  2,000 units a week.  It covers its costs for all 2,000 units if each week  it produces  and sells 1,000 units at £1 each.  The company  finds it  can sell a maximum of 1,500 units in  the home market at œ1.  If it reduces the unit price to 75 pence it could sell all 2,000 but that would  only produce  the  same   amount of revenue  as selling 1,500  at £1  each. Consequently,  it sells 1500 in the domestic market at £1 each and  the other 500 at 50 pence each (carriage paid by buyer) in foreign markets. Total sales  are £1750 instead of  £1500.

That is a very simple model of dumping but something akin to it happens regularly  with  differential  pricing from  country  to  country  (the European car market is a prime example of this).  No  state subsidy has been given, no state intervention of any sort has occurred.  Why should it  not  be considered as reasonable a practice as  the  toleration  of different national wage rates? In fact, why should it not be considered more reasonable because wage rates are directly linked  to such  hidden subsidies as those of  welfare and low  company taxation? (in fairness, the  economic activity of the dumper would also be linked to  wage  and tax subsidies, but  the connection would be more remote.)

Most contentious  perhaps  is the question of immigration.  Does  “free trade”  require the movement of people as freely as goods and services? This   is generally accepted as self-evident by purist “free  traders”. Yet there is no logic to the claim.  Economic forms  are made for  men not men  for  economic  forms.  We know as   a   matter  of  practical experience  it is possible to have the exchange of goods  and  services without  the  mass  movement of people. If a society decides  that  the benefit  gained from the free movement of people is outweighed  by  the social disruption caused by such  migration, it is a perfectly rational decision.  A  people may decide that they will have  or not  have  free exchange or movement just as they may decide to have this or that level of taxation  or welfare provision.   It makes no more sense to  say  a society which  restricts immigration – which all  advanced  states  in practice do – is not a “free trader” than to say they  are not a  “free trader”  because their income tax rate is higher or lower than that  of their competitors.

The  treatment of human labour as merely a factor of production  (along with  land  and  capital)   is  also  incompatible  with  the   liberal democratic  tenets of  the equal worth of each person  and  the  rights and obligations  of citizens.  Allowing  mass immigration  to   reduce wages  or the exporting of jobs to cheaper labour overseas is  treating human beings as being of no more account than inanimate objects.  It is inhuman.

So what does “free trade”  actually mean?  Does it  require merely that countries may  trade with one another without any formal barriers  such as tariffs and quotas?   Or should it take into account all those items such  as national tax regimes, non-tax fiscal measures,  wage  rates (where these are  set  by  the  state),  standards  of  practice  and manufacture   (official and otherwise),   and the size of  the  public sector. All of these are controllable either entirely or to some degree by men. In other words, they could be removed or altered.

If a  definition of “free trade”  is accepted which includes these  and other non-traditional elements of market distortion, the ultimate logic of  the definition is that “free trade”  as a global  concept   cannot exist  until  all peoples and countries are reduced or elevated to  the same general economic condition.

Those  who run the European Union would say that is precisely  what  is required,  at  least  within the EU. But the experience  of  trying  to create unified trading conditions at a supranational level in  the most advanced   of supranational   political   and   economic    entities, demonstrates just how difficult it is to create a supranational  market in which  there is a broad uniformity in the trading conditions  within its constituent national parts. Despite nearly half a century of trying through treaty after treaty and the covering of the EU members with  an avalanche   of  EU  directives,    there is  no  meaningful   economic uniformity  within  the  EU,  either in the circumstances  of  private enterprise  competition   or  in  the  function  of the  state.    The introduction  of the Euro has painfully revealed exactly how  disparate the  economies  of  even the richer EU states still  are  with Germany needing  low  interest rates to re-inflate  and  Italy  requiring  high rates  to  control  public  spending  and  the  European  Central  Bank paralysed by their inability to square such an economic circle.

The Holy Grail of “free traders” is comparative advantage.  This  is  a first rate example of a neat and emotionally satisfying (to a  certain type of mind) intellectual idea which bears little relation to reality. The idea is that every  country concentrates on making what it is  best at   and  the  overall global  product  rises  because  of   increased efficiency.   Even in theory this is rather dubious because it  ignores every  other  aspect  of  society than  a  narrow  view  of   economic relationships  and  assumes tacitly that a comparative  advantage  will last.  David  Landes in his  The Wealth and Poverty of Nations (Little, Brown  and Co 1998) cites the instance of the Englishman  John  Borrow, who in 1840 urged the states of the German Zollverin to concentrate  on growing  wheat,  and sell it to buy British manufactures and  comments: “This was a sublime example of economic good sense:  but Germany would have been the poorer for it. Today’s comparative advantage…may not be tomorrow’s.”

The  truth is that any definition of “free trade”  is as subjective  as that  of a “free market”.   It has no natural boundaries  because  the implications of both   ultimately embrace the whole of human  material endeavour  and there are no true natural variables on which to  base  a definition  – even those which might at first glance  appear  to  be objectively and naturally set, such as wages and prices, are determined by  matters other than the market, for example tax regimes and  welfare provision.

The “Free markets” con

Because they have the word free in them,   the terms “Free markets” and “free  trade”   have seduced  those  of all political colours to  treat them uncritically as ideas.  They are  considered good or bad but their intellectual coherence is rarely questioned. 

Neo-liberals   believe in a childlike quasi-religious fashion   in  the workings of  Adam  Smith’s   “invisible  hand”,  which,    moved   by enlightened self-interest,  supposedly creates the best of all possible material worlds through the operation of the market.    Socialists  see “free markets”  and “free trade” as economic “state of natures”   which must  be  ameliorated by the state before a civilised society  can   be realised.   Conservatives in the traditional sense no longer exist as a recognisable  political  force in the West,   but when they  did  exist they opposed “free markets” and “free trade”  primarily  on the grounds of  national security and the general disruption to  society that  they caused.  Nationalists of the fascistic kind have traditionally opposed the ideas because they see the nation  as a single organism  which  can only  be  strong  if it is master of its own destiny,  something  which an  only be achieved (they believe)  through state direction   of  both the internal market and of external trade.

There  are  varying  quantities  of  truth  in  all  these  ideological responses,    but their  utility is seriously tainted   by the lack  of any objective  or  even properly defined  and  permanent  prescriptive truth in the concepts of “free  markets” or “free trade”.  The reality of  these   ideas is  that they  are   arbitrary  chosen  bundles  of behaviours  which  are excluded  or included  at  the  will  of  their proponents. Moreover, the bundles of behaviours are not static.

The widespread  negligence in examining the coherence of these ideas is all the more remarkable because  their incoherence as theories and  the arbitrary and dishonest  nature of their practical realisation   is not only readily apparent but fundamentally undermining of the claims  made for them by their champions.

There  is a splendid  irony in the objection of the self-defined  “free marketeers'”  and “free traders”  to state intervention for the natural end of a  truly free market is  monopoly – or at least greatly  reduced competition resulting  in  oligopoly and the  rule  of  cartels.   All so-called   “free market”   societies  recognise  this   by   passing anti-monopoly laws. The “free market” is in fact a market controlled by the state in the most fundamental  way, that is, to prevent its natural workings.   It is one of the great propaganda triumphs of  history that “free  markets”  have been successfully  sold as  being  what  happens naturally  without  state intervention.   Call a  spade  a  spade  and substitute  the truthful “state regulated non-monopolistic market”  for “free  market”   and  the psychological shape  of  the  idea  changes dramatically.  (Some casuistical “free marketeers”might argue  that the “free” in free market  applies to the workings of the market rather than the market as a natural phenomenon.  That explanation falls because “free marketeers” invariably   make the blanket claim that markets only work  efficiently without  government  interference.  Their honest position would  be  to state  that they want state regulated markets to prevent monopoly. They will  not  do that because it would be an  acknowledgement  that  state regulation  of  the market is legitimate and hence remove  any  general argument  against  regulation.   That in turn  would mean any  form  of state regulation would be potentially reasonable and consequently  each form  of regulation  would have to be argued down individually  on  the merits of the case,  rather than simply empty-headedly dismissed on the grounds of no regulation = good; regulation = bad.

The  state regulated “Free Market”  is not even  a  natural  phenomenon made somewhat artificial by rules to exaggerate the natural  phenomenon in the same way that we breed animals to exaggerate nature.  Rather  it is just about as  far from being a natural phenomenon as anything  can be for  it goes against all Man’s inclinations,  both  individual  and social. 

Economic history is overwhelmingly a catalogue  of market   regulation, local  and   national,   from   guilds to governments.    It  would  be surprising  if  it  were not because   human  beings,  like  all  other organisms,  naturally behave to secure their own advantage or  that  of their  group.  Extended to the nation state,   this natural   behaviour has commonly  resulted in  domestic markets  being  protected  against foreign competition.   Whether this is a good or a bad thing is another matter  – a question I shall deal with later – all I am concerned to do at  this point  is  to nail down  that  the  fact  that  protectionist behaviour is  what is natural.

Historically,  whether  you were anything from  a rich merchant  to   a poor day  labourer it was obviously not in your personal  interest  to allow others free access to your markets to offer the goods or servicesat a lower price or to work for lower wages.     The merchant  might bedriven  to   bankruptcy  by competition, the  labourer  from  his  job. History also tells us that   whatever their  previous economic station, such people  will probably  not be able to find  equivalent or  better paid employment and often may not be able to find  any  employment  at all where structural unemployment arises.   What was historically  true not only   remains  true  today,  but its  effect  is  much  magnified because the  opportunities for competition are  greatly  increased  by modern communications and the ease of travel and cargo transportation.

Of  course,  any individual or sectional advantage causes strains in  a society  and if the material privilege of any person or  group  becomes excessive,  sooner or later there will be a successful revolt  and  the wealth in a society will either be shared more fairly through a  change in  the  way the  society is  structured,  for  example,  through  the abolition of tolls, the  ending of state monopolies  or even through a removal  of the rich as a class without any increase in the  wealth  of the majority.

But wherever wealth distribution through social change has occurred  it has normally  been done with the express  intention  of  benefiting  a particular group or even an individual in the case of monarchs. The odd thing about “free marketeers”  is that what they ostensibly advocate is not to privilege any particular individual or group but  to  benefit society as a whole. Whether free markets do so  is another matter,  but that is their claim.

The  “free marketeer”  says to a population, do what I say and in  time society will become richer.  He does not say this person or that  group will become richer or even all will become richer,  but merely that the society as a whole will become richer.  This is an extraordinary  thing to ask people to trust in.  It is also the most wonderful  blank cheque ever  written to a politician because not only does it absolve  him  or her of any  need to take the responsibility for regulating the economy, it  also  means  that he or she can never be  held   to  account  for dishonesty   by any individual if that individual is  personally  worse off.  All a  “free marketeer” politician has ever claimed is that  his economic  way  will make society richer.  Provided society  overall  is richer, he has met his met his promise.

It is also telling for their intellectual credibility and honesty  that “free marketeers”  will oppose government interference in such  matters as subsidies,  quotas,  embargoes,  wage rates and working  hours  and grumble  about tax rates and public expenditure,   but   are  generally quite happy to see other gross distortions of the market  deriving from government   action.  They  not only tolerate  patents,  copyright  and trademarks,  but  often defend them as  property in themselves  and  asdevices  which   actually  improve economic  performance  because  they encourage invention, investment and expansion.  In addition,  those who constantly  bleat about Adam Smith’s “invisible hand”  sorting out  the business  wheat  from  the  chaff  insist  that  limited  liability  is necessary.  This  of  course is also a violent  interference  with  the market because it means that the individual shareholder  never  takes full responsibility for their investment.  (It is worth noting that the British industrial  revolution  –  the  one  and  only   bootstrapped industrial revolution  – took place before  limited  liability  became legally possible (Limited Companies Act 1862) and at a time when patent rights  were insecure and in practice limited to the  domestic  British market.)

It  is  true that none of these things are actually part  of  what  the concept of  a “free market”  is and that they are inimical to  such  a market,  but the fact that almost all modern  “free  marketeers”  have  tacitly incorporated them into their vision of what a “free market”  is demonstrates their   intellectual  confusion  (or  dishonesty  if  you prefer).

 The “free market” as its proponents conceive it

Let us put aside for the moment the fact that “free markets”  are state regulated markets and ask the question  what  is a “free market”  as it is conceived by “free marketeers”?    A jolly good question.  Even  if market distortions which appear acceptable to “free marketeers”  such as patents and limited liability did not exist,   that would leave many other   things which prevent unfettered domestic competition.   In  an advanced modern economy these include:

Taxes

Non tax fiscal measures, eg control of interest rates

The state of the currency

Exchange controls

Overall Government expenditure

State Subsidies

Industry and trading standards,  official and otherwise

Public sector employment

Transport costs

Public ownership

Defence

Direct and indirect Government intervention

Copyright, trademarks and patents

The moral  and social climate, eg, a tradition of Welfare The feeling of the people, eg, the national feeling of Japanese Practical cultural barriers such as the difficulty of a language

Dumping

Transport costs

Working hours

Trading laws

Labour laws

Wage rates

Bureaucratic differences

Company laws – particularly the attitude towards foreign ownership

Banking laws

Banking system

Social policy – welfare, health etc

Physical infrastructure

Honesty of public servants

Foreign policy

National strategic considerations

Education – The amount spent, school leaving age, curriculum,

Limited Liability

Environmental laws

Some  of these things such as subsidies,  patents,  quotas and  limited liability  could be obviously and  legitimately  ruled out of order  by a “free marketeer” because they are deliberate state interferences with competition,  but what of items such as the provision by the  state  of education  or  the  physical  infrastructure of  a  country?  They  are undeniably distortions of competition at some level,  but they are  not deliberate attempts by the state to distort competition. A purist “free marketeer”  could  just about  say such things were no business of  the state  and still be intellectually coherent because it is  possible  to conceive  of  a  society without such state  provision.   But   however purist they might be,  sooner or later the “free marketeer”  will  run into features which undeniably restrict competition  but  which  must exist  simply because they are an inescapable part of society. The most obvious is tax.

Any modern state needs a large tax revenue to sustain itself,  the only questions  to determine being how large should be the revenue and  what it should be spent on?   Some things such as defence and  policing  are inescapable  expenditures  for any state,  although   even  there   the amounts to be  spent are debatable and elastic. Items such as education and  welfare are  more subject to variable  expenditure.   Nonetheless, substantial amounts are as a matter of contingent fact invariably spent on such items by all advanced states.  Such countries also engage to a lesser or greater degree in all the forms of regulation listed above.

In  theory,  and even more in practice,  the notion of a “free  market” seems to rest on little more than anti-monopoly laws,  wages and prices set  by  the market (although in practice this does not  happen  purely through the market because of welfare provision, tax regimes etc) and a lack  (or at least a minimum)  of  state interference in such areas  as health and safety, employment law and  company law. 

The  inclusion of these narrow criteria are merely a subjective  choice made  from a much larger menu of man-made distortions of   the  market. Consequently,  there  is no objective coherence to the concept  of  the “free market”  as it is conceived by the “free marketeers”.   It is  an arbitrary  ideology based on subjective choice.

The bigger the genome, the less efficient?

Researchers at Kew Gardens’ Jodrell Laboratory*  have identified the largest genome so far discovered. It belongs to the Paris japonica, a slow-growing herb native to the mountains of  the Japanese island of Honshu and  to the chagrin of many a frustrated gardener trying to cultivate in gardens , a very difficult plant to grow.  The difficulty in reproduction is probably related to the size of the genome,  for the larger the genome , the greater the difficulty in reproducing because every time a cell divides it has to reproduce the DNA. The more DNA, the longer that process takes and the more resources it requires. 

Homo sapiens has a measly three billion base pairs in its genome. (Two nucleotides on opposite complementary DNA or RNA strands that are connected via hydrogen bonds are called a base pair.  Adenine (A) forms a base pair with thymine (T) and guanine (G) with cytosine (C). In RNA, thymine is replaced by uracil (U)). Paris japonica has  150 billion base pairs.  Paris japonica replaces the previous record holder for the largest genome ,  the marbled catfish (Protopterus aethiopicus), which had 130 billion base pairs. At the other end of the genome size scale there is a bacterium called Carsonella ruddii, which has fewer than 160,000 base pairs.

This  immense disparity in genome size raises an interesting question. Why should genomes in general vary so widely and why does homo sapiens, indubitably the organism which has the most varied behaviour by far of any animal (arguably the best benchmark to judge the sophistication and capacities of an organism)(  should have a genome so much smaller than a plant or a fish? Efficiency is a plausible reason.

Efficiency improves with fewer components. Take the analogy of  written languages. Ideographic languages such as Chinese have  thousands of characters to do the same job that the alphabet does with 26 letters. If you set a dullard and a genius the task of devising a form of writing the dullard would produce Chinese characters and the genius the alphabet.  Another analogy. The more exotic versions of the Swiss Army knife have  several dozen implements, most of which are never used. The Swiss Army knife would be a much more efficient item if it had far fewer implements which were designed to be dual purpose, for example, a double edged blade with different types of edge on the two edges or a blade  with a file on its non-cutting surfaces.

Those two analogies  could explain why homo sapiens has such a small genome. Our genome may be comparatively small because it has reduced the number of components in the cause of efficiency.  The question then arises why would natural selection work to make some genomes more efficient than others.  Three likely candidates put themselves forward. The first is the innate capacities of the ancestral organism, the second, the environment in which an organism evolves. The third, the existential imperative to pass on the organism’s genes.

It is noticeable that the largest genomes are attached to organisms which are relatively low on the evolutionary scale.  It could be that they simply do not have the capacity to refine their genomes to become more efficient while  those higher up the evolutionary scale have the capacity in varying degrees. (I would bet that mammals have smaller genomes on average  than reptiles and amphibians).  This would mean that instead of refining their genomes towards efficiency every time a favourable or at least non-harmful mutation occurs this gets added to the genome which gets ever larger.   

As for environment, it is noticeable that the organisms which have the very large genomes tend to be in environments which have probably  been stable.  Paris japonica comes from a very restricted  mountain landscape which was on an island ; catfish wallow around in murky water.  Natural selection would not be directed towards improving genetic efficiency because the organisms were doing very nicely thank you.  Conversely, homo sapiens and his evolutionary forebears had immense selection pressure on them to survive because they were widespread enough to experience a  considerable range of environments both geographical and over time.  It may also be that living on land is a more demanding environment than water.  To that can be added the high intelligence, self-awareness  and language  of  homo sapiens which produces unique  selective choices because the mental environment is rich and varied in a way that it cannot be for any other animal.  Such environmental pressures were  probably the prime or sole  driver  for greater efficiency, although of course the flexibility of the genome could be dependent on mutations which were independent of environment.    If so, then the efficiency of our genomes is simply a lucky chance.  

If the prime directive of existence is to pass on genes, there would be a strong selective pressure to reduce the size of the genome to increase  reproductive capacity.  For such a large animal  (we are in the top 5% of land animals by size) homo sapiens has become a most fantastically successful breeder, no other animal of comparable size comes close to our breeding success.  A very large genome would have greatly  restricted such reproduction both in terms of time taken to reproduce and the increased likelihood of genetic defects (more genes, more potential  defects).  

* The team’s findings are already available online and will be printed in an upcoming issue of the Botanical Journal of the Linnean Society. The paper can be downloaded from

http://onlinelibrary.wiley.com/doi/10.1111/j.1095-8339.2010.01072.x/abstract

Economics and the liberal internationalist mind

Freefall: Free Markets And The Sinking Of The Global Economy  by Joseph Stiglitz

Published

USA W W Norton and Company Inc. 2010 

Britain Allen lane 2010

ISBN 978-1-846-14279-6 

 Robert Henderson

This is a profoundly depressing book.  It is not so  because its subject  is boring  or delivered in the leaden prose commonly  beloved of academics.  Rather, the lowering of spirits arises  from the fact that someone who won the Nobel Prize for Economics in 2001 and served as chief economist with  the World Bank shows himself to be  naïve to the point of imbecility.

Stiglitz’s naivety is not simply an  ad hoc expression of a character trait. It is shaped and ordered by  being  imprisoned within  an ideology which contains a large dollop of fantasy, a fact  made  wondrously  ironic because a  thread running through the book is the levying of the same charge by  Stiglitz against those who worship at the altar of Milton Friedman as in    “Economics had moved  – more than economists would like to think – from being a scientific discipline  into becoming free market capitalism’s biggest cheerleader.” (p238).  Note the claim that economics was once a “scientific discipline”. More of that later.

Stiglitz’s ideological straitjacket is what might   be called  Spendthrift Internationalism. Like virtually every neo-Keynsian he seems to have forgotten what Keynes’ recipe for economic governance was, namely that it was a two part programme; the reduction of public debt during economic upturns and the spending of healthy amounts of public money during downturns even if this means increasing public debt. Stiglitz  ignores the putting money aside in good times part of the equation and fails to raise the question let alone answer it of whether having failed to follow  the first part of Keynes’  prescription – the putting aside of money in good times – the second part – the use of public money even if it has to be borrowed to maintain aggregate demand – is the  best way forward, which it may well not be if the public debt swells to such heights it seriously distorts  and depresses  the economy for decades by suppressing demand  through the need to pay the money required to service the public debt, much of which will go to foreign bond holders.  These sums can be immense especially when interest rates return to more  normal levels. Ironically, in view of his failure to substantively address the question of the dangers of  massively increasing  public debt,  Stiglitz makes a point of emphasising  that the  $1.5 trillion of US government debt  currently held by China costs the US  $15 billion pa at 1 per cent but  would cost $75 billion at 5 per cent (p190). 

The man’s weakness for ideological capture is further  displayed by an  unquestioning acceptance of  the man-made global warming religion, for example, when he writes of the US energy industry “…which poured greenhouse gases into the atmosphere, even with incontrovertible evidence that it was leading to climate change.” (P187)  or  puts his general case with “ The biggest environmental challenge, is of course, that posed by climate change. Scarce environmental resources are treated as if they are free. All prices are distorted as a result, in some cases badly so. “ p188) 

Stiglitz’s  solution to the present economic disaster  is, God help us,  global regulation: “If  a new global reserve system, and, more broadly, new frameworks for governing the global economic system, can be created, that would be one of the few silver linings to this otherwise dismal cloud.“ (p211).   A good idea of where he is coming from can be gleaned from his chapter  and section headings  which include  A New Capitalist Order, Towards A New Society, Toward A New Multilateralism. (I wonder if Stiglitz  is aware of how closely these ape in tone the fascist and Nazi slogans of the 1930s?)  

What form would this Stiglitzian global regulation take?  He  would require  nation-states to effectively sub-contract the economic management of their country to some as-yet undefined world authority: “In a well designed global reserve system countries with  persistent surpluses would have their reserve currency allocation diminished, and this, in turn, would encourage them to maintain a better balance. A well-designed global reserve system could go further in stabilizing the global economy, for if more of the global reserve currency were issued when global growth was weak, it would encourage spending  – with a concomitant increase in growth and employment.” b(p234).  

But Stiglitz has much greater dreams of world control: “Achieving the new vision will require a new economic model – sustainability will require less emphasis on material goods for those who are over consuming and a shift in the direction of innovative activity. At the global level, too much of the world’s innovation has been directed at saving labour and too little at saving natural resources and protecting the environment – hardly surprising given that prices do not reflect the sacristy of natural resources. There has been so much success in saving labour that in much of the world there is the problem of persistent unemployment, But there has been so little success at saving natural resources that we are risking environmental collapse.”  (p192)

It is difficult to see how anyone who is not blinded utterly by a quasi-religious devotion to internationalism could believe such a thing. The  history of international organisations which attempt to subsume the interests of nation states for a claimed  general good  is one of unbroken  failure, from the League of Nations to  the present day farces of the World Trade Organisation – which applies its regulations according to the strength of transgressors rather than as a matter of  law   –  and the UN, an organisation  overwhelmingly comprised of authoritarian states which  routinely flout in the most emphatic manner the moral principles on which the organisation was founded.

Most pertinently for the present, we have the example of the Eurozone countries twisting and turning as they  are faced with the  desperate  prospect of a  Euro member, Greece, going bankrupt, with the likes of Spain, Portugal and the Republic of Ireland forming a disorderly queue behind the Greeks to be next to the point of sovereign debt default. 

Despite the fact that the  Euro is in danger of collapsing,  the richer members of the EuroZone are showing sustained reluctance to transfer money to the poorer ones to stabilise the currency or to emphatically underwrite their  public debt. As I  write (5 May)  an agreement appears to have been finally cobbled together to prop up Greece  with a mixture of loans  from the richer EuroZone states and the IMF, but it is far from certain  either that the Greek people will allow the austerity measures which are a condition of the loans to be put into operation – a riot is currently happening in Athens – or that they will be any more than a temporary reprieve for Greece. If the rest of the so-called EuroZone PIGS ( Portugal, Ireland, Greece and Spain) make up the PIGS) come calling with similar requests for help it is unlikely that they could be accommodated by either the EuroZone or the IMF.

This  reluctance of EuroZone states to act outside their national interest should be  salutary for the internationalist, because the European Union is by far  the most advanced example  in the world of a supra-national political union formed without the use of overt force. Moreover, the Euro is the  jewel in the federalist  crown for  the  political elites of the major countries  within the EU, elites  who  are constantly, overtly and covertly, pressing forward the agenda for a United States of Europe. If the Euro falls  it will deliver a deadly  blow to their federalist dream,  yet even that  will not persuade them to resolutely support Greece because of their  fear of  uproar and civil disorder from their national populations. 

 If the EuroZone  states with half a century of  experience of the EU in its various incarnations will not act as a single entity without regard to national interests,  how much more fanciful  is the idea of  the establishment of a global  regulatory system in a jurisdiction where there is no experience of an existing supra-national union and vastly greater differences in wealth, culture and history than  exist within the EU?  It is so improbable that fanciful is much too polite a word for the project  touches the confines of lunacy.

It may be  nonsense in terms of its practicality, but it is also dangerous nonsense, because  even though it could  never be a  practical proposition,  the effort to put it in place would result in gross losses of national sovereignty and that means, as those of us living in the European Union know only too well, an ever looser democratic grip of electorates on their political elites.

Stiglitz is also remarkably negligent when it comes to the practicality of  regulating  private enterprise for he gives no indication that he has any meaningful grasp of  the difficulties.    Even at the domestic level,  the experience of the past decade starting with  Enron shows how poor even the governments of the most sophisticated economies are at preventing everything from mind-boggling recklessness to outright criminality. This is partly due to collusion between politicians and business in reducing legal restraints on what business may do and  partly the sheer difficulty of devising a system of regulation to deal with massive private concerns which frequently spread across their activities across the globe.  To take just two examples. First, it is very difficult to find people willing and able to do the work to accept  for public sector  salaries and operate within the constraints of public service – a particular problem in the banking sector because of the vast remuneration paid to those in need of regulation and the complexity of the financial instruments used and other transactions such as currency speculation. Second, the use of audits conducted by private firms paid for by the company audited  as a regulatory check is questionable in any circumstances because of the conflict of interest. It becomes  meaningless in the case of very  large companies, because only a handful of accountancy firms are large enough to deal with the audit and they not only receive fees for the audit but frequently sell other services such as management consultancy to the firms they are auditing.  [Those wishing to understand more of the practical difficulties can find chapter and verse in my article “Enron accounting… and how to prevent it “. which I enclose below].  If it is immensely difficult to keep a grip on businesses operating in a national market, imagine how those problems would be multiplied if  there was an attempt at a global regulatory system for banks and their ilk, a regulatory regime which would have to spread across a vast array of political systems, business practices and cultures. 

The infuriating thing about  Stiglitz  is that he does not have the excuse of ignorance or incomprehension for his naivety.  He frequently identifies problems but then  ignores them, most plausibly because they do not fit with his ideology . For example, he acknowledges the pull of national interest and castigates at length the failure of the present  global financial authorities such as the IMF and World  Bank to either prevent the present crash or to have managed  either sympathetically or efficiently the economies of those countries which sought help. In spite of these flirtations with reality  he still has a childlike  faith that another set of institutions  can succeed, although  pathetically he admits that  “What the new system of global economic governance will look like may not be clear for years to come”. (p212).  In short, he is in the NeverNeverLand of “Let my wishes come true

This refusal to accommodate himself to  reality extends to market economics itself: “Adam Smith may not have been quite correct when he said that markets lead, as if by an invisible hand, to the well being of society. But no defender of Adam Smith  would argue that the system of ersatz capitalism to which the United States has evolved is either efficient or fair, or is leading to the well-being of society.” (p200).

What Stiglitz is complaining about here is both the amount of taxpayer subsidy, hidden and overt which American business receives, from agricultural subsidies to the present gigantic banking bail-out  and the general ability of corporate America to reduce competition through political lobbying. The problem with his complaint is  it does not address the question of what constitutes a free market and how the concept  of a free market is aligned with politics.

A truly free market would be one in which there was no state intervention, the consequence of which would be monopoly or at least greatly reduced competition.  The fact that  anti-monopoly laws are the norm rather than the exception in advanced economies means that the markets in even supposedly market economies are not only  state-regulated markets,   but markets  regulated in the most fundamental way to prevent the natural end of a free market.  Labels matter. Call laissez faire economics not free market economics but state-regulated market economics or even anti-monopoly state-regulated market economics and it takes on a very different emotional connotation.  Free is a feel good word;  state-regulated generates at best a neutral emotional response and at worst is a feel bad word.

Stiglitz  is strongly in favour of  such state intervention :

“Making markets work is…one of the responsibilities of the state.” (p 201) and fingers the Left for taking the lead in this area “It is an irony that the “Left” has had to take an active role in trying to get markets to work in the way they should, for instance, through the passage and enforcement of anti-trust laws to ensure competition, through the passage and enforcement of disclosure laws to ensure that that market participants are at least better informed; and through the passage and enforcement of laws on pollution, and financial sector regulation… to limit the consequences of externalities.” (p201) . Moreover,  he does not trust the market wholly even where it works efficiently: “Efficient markets can…produce socially unacceptable outcomes”.  (p204)  

Stiglitz cannot or does not want to see that state intervention  compromises the very idea of  a free market because it is a market designed not  by  Nature but  men. Once it is allowed that it is legitimate for the state to intervene in the market,  the pass has been sold on the concept of a free market, because intervention of any sort having happened,  it is impossible to argue that any other sort of state intervention is in principle wrong, dangerous or inefficient. All that can be done is to argue on the detail, that this or that is contingently undesirable.   The situation is akin to that between free expression and censorship, You either have free expression or a range of permitted opinion. One breach of free expression and any censorship is arguably permissible. It is also noteworthy that Stiglitz does not tackle the problem for free markets of other gross state interferences  such as limited liability, patents and copyright or the less overt market distortions,  particularly those in evidence in international trade , such as different tax regimes, legal systems  and social legislation. (It is important understand that laissez faire  economics and international trade are not the same thing. International trade draws upon any form of domestic economy, from the market-driven  to the wholly state owned). 

An even more  fundamental  difficulty is the fact that  Stiglitz  starts from the position that capitalism/market economics can be objectively defined and  has an  objective reality. This mentality is epitomised by Stiglitz’s  frequent references  to economics as a science, an example of such claims I gave early in the review.  This is a common practice  amongst the social science academic fraternity  and is born of  the inferiority complex commonly found amongst them,  for social scientists know  in their heart of hearts know that subjects like economics lack the predictive power of  the natural sciences and are in their often speculative and subjective content  more akin to the humanities than science.

Physics and Chemistry allow a great deal of prediction because they are concerned largely with describing physical and chemical phenomena and events which are bound by  natural laws.  Other sciences like  biology and  geology,  are less successful with prediction, but nonetheless they concern themselves with objectively verifiable facts such as the physical structure of organisms and  the sequence of rock strata.  They can also meaningfully predict in areas such as genetic inheritance .

The social sciences have much  less predictive power than biology and geology.  Psychology in areas such as IQ testing and the creation of  experiments come closest to the natural sciences in method,  but even here the vast amount of dispute over the results of such testing and experimentation suggests that the subject is far from certain in the way that the natural sciences are certain.

 But most of social science is even less certain than those narrow aspects of psychology for it deals with observations of human behaviour which by their nature are in some degree tainted with subjectivity however hard the researchers try remove them. For example, how can class, or  if you prefer socio-economic status, be objectively decided?  The income of people can be measured as can their educational accomplishment, but class is far more than that because it embraces not only cultural difference in terms of interests,  but the different social relationships classes generate, for example, traditionally the poor have formed a\ much more interdependent relationship with one another than have  the better off  amongst their own class.

Social scientists over the past half century have attempted to disguise this unfortunate lack of predictive ability and permanence of observed phenomena by  introducing ever more complex mathematics and statistics into social sciences to lend it a specious  similarity to sciences such as physics and chemistry. It also had the effect of making social science  ever more opaque to the lay public.  (The deliberate use of mathematics to make work inaccessible to most is not a new phenomenon. Newton confided to Edmund Halley that he had made the mathematics of the third volume of his Principia more difficult than need be to make it impossible for those he called “the smatterers”, ie,  those with some mathematics but not a profound knowledge, to challenge his work.) This opacity meant  in the case of economics that objections to economic theory, especially the dominant theory of the day, could be readily evaded where those objections came from those outside the academic fraternity.

In the case of economics there is precious little similarity with the natural sciences for its predictive power is very weak and much of its theory is based on supposition rather than hard fact. Even the most basic “laws” of economics, those of supply and demand, are not scientific laws in the sense that Newton’s laws of motion or Boyle’s Law are laws, for there are a significant number of instances  where the  higher the price of something  the more will be sold (extraordinary demand curves),

Such  demand  arises in three  situations. The first is where the person wishes to pay a certain amount for something because they either wish to give someone a present which will reassure the recipient by its value that they are valued by the giver or to acquire something expensive for themselves which will impress others. The second is where something is being offered at such a low price that the prospective buyer doubts its quality or provenance. This is particularly true of food and drink,  The third is brand loyalty. A person may be able to buy something of equal quality at a lower price, for example, supermarkets’ own brand goods, but prefer to pay more for a brand of which they   grown.

There is also a great deal of  irrationality (as economists define irrationality, ie,  making spending decisions which are  not the most materially beneficial or even harmful ) in the way people  make economic decisions.  For example, people smoke, drink, take drugs and overeat despite knowing they are spending money on that which has deleterious effects on their health. They bet even when they know  it is very long odds that  they will win. People also commonly fail to invest money saved in the most profitable way, not least because they lack the expertise to make any meaningful judgement themselves of what would be the best bet. 

The point about such behaviour is that human beings are not desiccated calculating machines. People  drink, take drugs, smoke and overeat because it gives them pleasure or to satisfy an addiction, which in a sense is pleasure or at least an easing of pain. They bet despite astronomical odds against winning because they are buying that precious human asset, hope. They may  fail to make sound investments because they are not willing to devote the time to learn about investments because they are either intellectually lazy or prefer to use their time in other ways. Such qualities cannot be readily quantified and  probably not meaningfully quantified at all. All  this  uncertainty  gives weight to the old joke about ask three economists for an economic prediction and you get four opinions.

Does all this uncertainty  mean  economics has no value, that it can predict nothing of consequence?  It is a moot point. The problem is not that economic predictions never come true,  but that there is no certain way of deciding which predictions will come true either in terms of when something will happen or its exact effect. Government forecasts are routinely seriously wrong and no economic forecaster or economic model is consistently reliable.

The problem of deciding which forecast  is most likely to be correct is further complicated by the facts that economics is tightly tied to politics and that academic economists will be subject to the natural social pressure of  going along with the herd even if they do not want to. There is also the strong tendency within humanity towards ideological capture, especially those ideologies which promise a ready and comprehensive way of guiding people to make decisions. .  Laissez faire economic theory is a prime example of such an ideology, for  it both removes from its adherents any need to go through the laborious and demanding job of assessing situations pragmatically and provides at least in what might be called its vulgar form a simple rule to apply in any circumstance, namely, the market is God and will provide. There is a further problem with laissez faire: its consequences, whether intended or not, are in practice to promote the interests of the haves over the have nots. Hence, there is also a base motive to promote it.

Is there a better way of  forecasting economic activity?  Here is a broad suggestion I have played around with for some time but never had the resources to test.  Let us suppose the trade cycle in a modern advanced economy is primarily driven by the ability of people to satisfy their wants within the constraints of their income, wealth and ability to gain credit. During an  economic upturn people are purchasing that which they can afford in the sense of having the wherewithal to buy it  rather than whether they can afford it in the long run. As wants  within the constraints of the individual’s immediate resources are met the upturn slows. Eventually a proportion of the population has  satisfied sufficient of their obtainable wants to cause an economic downturn because  overall demand drops as obtainable wants become fewer and fewer.  The economy then declines until demand begins to revive because new obtainable  wants have arisen from the wearing out of  existing physical items and the creation of new models of physical items  and the introduction of entirely new products  and services.  The trade cycle them moves to the upturn. 

Bubbles are extreme instances of the satisfaction of obtainable wants, with the bursting of the bubble occurring when enough of those  capable of satisfying a  want for the bubble product  have satisfied that want for the  market from the product to decline.

If that hypothesis is correct, it should be possible to predict both the general trend of an economy and bubble events by tracking the patterns of expenditure of  different income groups both within national economies and over broader economic areas.   Would it work? Frankly, I do not know, but the logic seems sound and it would if honestly done at least provide objective data on which to make a decision as opposed to the economic modelling which guides so much of modern economic policy making. As present methods of predicting are so poor, it would be worth trying anything which had a plausible chance of success, Suck it and see.

Stiglitz wants to have his economic theory cake and eat it. He recognises the fundamental problems raised by both laissez faire  economics  and globalisation Yet when shove comes to push Stiglitz  still supports both. He wants to control economic activity for the purpose of maintaining what he wrongly imagines to be the operation of the free market, whilst advocating a good deal of state involvement in the economy beyond merely regulating the banks, for example, his draconian view of what needs to be done to satisfy the Global Warming agenda and his desire to see large transfers of wealth from the First World to the developing world. Yet despite this authoritarian caste of mind, he still fancies himself to be a pro-markets man.

One last example of Stiglitz’s divorce from reality.  He is still banging the tired old comparative advantage drum, the idea  that countries (or areas within countries) should concentrate their economic efforts on that which they can produced most competitively.  ( In the early days of laissez faire economics as a dominant ideology in Britain (from the 1840s onwards), the likes of Cobden, Bright and Ricardo argued that Germany, then un-unified, should forget about industrialising and concentrate on agriculture.)  The idea epitomises the detachment of  laissez faire from reality, for it  ignores small matters such as national security through self-sufficiency in vital goods and services and the danger of  structural unemployment arising from sudden drops in demand – caused by war, blockade, natural disaster, economic depression, the rise of new international competitors or the obsolescence of a product- for the narrow range of products offered by the country narrowing its economy on the  comparative advantage principle. 

Stiglitz puts forward an adaptation of the classic idea:. “A country’s comparative advantage can change: what matters is dynamic comparative advantage. The East Asian countries realised this. Forty years ago, Korea’s comparative advantage was not in producing chips or cars, but in rice. Its government decided to invest in education  and technology to transform it comparative advantage and to increase the standard of living of its people.” (pp195/6)

This is pure baloney. South Korea has not concentrated on what they did best but has  gone  through the dramatic  process of industrialisation. That is a one off step change not merely an economic event which be repeated.   Once  industrialised, all a  country can do economically, short of de-industrialising, is make changes in the detail of its economy, a very different process to that of moving from a pre-industrial to an industrial society. . Moreover, the idea that it is efficient either in terms of economic progress or social utility for a country to constantly have to re-invent its economy would I suspect strike most people as  absurd. Human beings need a degree of stability in their lives.

Stiglitz fancies himself to be a rational man applying a scientific discipline. In reality he is simply a man with a deep need for certainty and security. This makes him a sucker for ideological capture, and once captured he  comfortably   ignores facts which conflict with the ideology and  takes past failure to implement the ideology as evidence not of the impracticality of the creed,  but as a signal that the ideological ends were not sought fiercely enough and, consequently,  must be  pursued with ever greater vigour and ruthlessness until the ends are obtained.

This book is worth reading for one reason and one reason only: as a primer on the modern internationalist mentality of those who increasingly control our lives.  At that level it is a truly frightening read.

White men can run

“Let’s start with the biological differences in sports, which is something almost everyone observes. Jon Entine’s recent book Taboo: Why Black Athletes Dominate Sports and Why We Are Afraid to Talk About It, addresses the old cliché that “White men can’t jump” (and the new one that Oriental men jump even less well). Entine shows that in sports, it is Black men and women who can sky! And yet, as the data also show, it is mainly Blacks of West African descent who excel at running over short distances, while Blacks of East African descent – from Kenya and Ethiopia – excel at marathon running over long distances. These differences between East and West Africans show that taking an average can sometimes gloss over important distinctions. Still, Blacks from both East and West Africa excel at one or another kind of running. In sports, Blacks as a group, have a genetic advantage. “ J Phillipe Rushton http://theoccidentalquarterly.com/images/jpr21-chart1.jpg

The idea that blacks are inherently more athletic than whites  (and even more so than Asians)   is widely  accepted as true even in academic circles which deal with racial difference.  People look at the finals of track events at the Olympics and see a disproportionate number of blacks, especially in the sprint events, and conclude that this correlation between race and  athletics winners proves the case for black athletic supremacy. The problem with this conclusion is that it is merely a correlation and a correlation which has not been subjected to rigorous examination.

There are good reasons to suspect  that  innate  black athletic  advantage  does not exist.  The 800 and 1500 metres events  were dominated  in the late nineteen seventies and eighties by whites such as Seb Coe, Steve Ovett and Steve Cram. Their times look good today.  – Coe’s 800 metre record only went a few years ago.  The current Olympic 400 metres champion is the  white man Jeremy Warriner. The 200 metres at the  Sydney Olympics was won by a white man  the Greek Kostas Kenteris. When the black Michael Johnson (arguably  the greatest track athlete of the past  half century) won the 400 metres in the Atlanta Olympics he was followed home in second by the white Roger Black.

If whites can  compete  successfully as the people mentioned above competed , clearly whites are not genetically incapable of beating even the best black athletes. Of course,  there is still the question of whether one race is on average more naturally endowed with  athletic ability than others,  but if  there are substantial  numbers of whites who win  at the highest level and set times which blacks do not beat either at all or by much, then  it is reasonable to question  whether whites are inherently inferior as athletes. The starting point for such questioning is  the numbers participating in athletics in the various disciplines and their racial and class distribution.

Fifty years ago most  Olympic  track winners  were white. Then as decolonisation took place  and multiculturalism gripped  hold of  places such as the USA and Britain, more and more black athletes entered  track athletics. They began to dominate  the  sprints, then   the longer distances. The question is, did blacks  begin to dominate because  they were inherently superior to whites or because the number of whites taking up track athletics was  far fewer than the number of blacks doing so?  An analysis of overall numbers  is required.  I  have been unable to identify such an analysis.

Then there is the question of class. Athletics has  the reputation of being a largely middleclass pursuit for whites in the West, while black athletes are perceived as coming from poorer backgrounds. If these perceptions are correct,  the white athletes are being drawn from a much smaller population. An analysis of  the class of athletes is  required. Again, no such analysis appears to exist.

During the time of the  Soviet Union those countries which came  within the European Communist bloc were concerned with winning as many medals as possible. This pushed them to concentrate on the events which were less competitive and more  susceptible to coaching. These were the field events such as the javelin and long-jump. This  potentially reduced the number of white athletes  available to compete in track events.

Athletic scholarships  may also have a role in promoting  black athletes, especially in the USA. Political correctness  may have caused these to be given to blacks disproportionately. An analysis of  how scholarships are awarded, for example, are they formally or informally reserved for blacks? Similar exercises are needed for  charities who make awards to athletes and for bodies which dispense taxpayer funded aid to athletes.

If a human activity becomes dominated by one  race,  ethnic group or class, there is a tendency  for those outside  whatever the group it is to cease trying to engage in the activity.  If  blacks have done disproportionately well in  sprinting  over the past forty years, whites will tend to drop the idea of even trying to enter competitive sprinting.

Then there is the question of racial admixture. Many top “black” athletes are of mixed white/black parentage. Why should that be if blacks have an innate advantage?

That blacks do not all excel in the same type of  events is a pointer to a cultural rather than a genetic reason for  their disproportionate success in recent decades. The idea that blacks from the West Coast  of Africa have one advantage and blacks from the East Coast another  is rather odd bearing in mind the size of Africa and the racial diversity found there. It would make sense to say this local population group had this advantage and another that advantage if the groups were isolated (this might be the explanation for the island of Jamaica‘s remarkable record of producing great sprinters) , but  it stretches credulity to believe the entire continent below the Sahara  is divided by different types of  genetic athletic advantage, especially as it is known that there have been in historic times large scale movements of people  who originated in West  and central Africa to Southern and Eastern Africa (the Bantu peoples).

The fact that East Africans shine in middle distance events  is plausibly  a consequence of the fact that Kenyan  government put considerable resources into promoting  middle distance running after the success of Kip Keino.  It is noteworthy that the rest of East Africa has not produced an army of  such athletes and that many of the outstanding runners of the past ten years have not be East Africans but north Africans who are racially very different. .

Even the claim that most top black sprinters  come from West Africa is debatable. Slaves were taken from deep into the heart  of Africa. Most of the black top sprinters come from the USA or the Caribbean.. Many have a white admixture. Very few West Coast Africans are top sprinters, despite large numbers of West Coast Africans  who have emigrated to the West.

Finally, there is the  question of drugs. Many sprinters have tested positive for drugs  in the past thirty years. Most of those have been black, an unsurprising fact because most  top sprinters  have been black during that period. Many others have provided tests which suggested drug use without being sufficiently high to fail a drug test, for example, Carl Lewis and Linford Christy..  The physiques  of most black sprinters in the past twenty years in particular have looked suspiciously like those of bodybuilders, a group which is notorious  for using drugs such as steroids. Unless the truth about drug use in the period of black sprinting ascendancy  is known, and it probably never will be,  it is difficult to assess exactly what is the natural athletic ability of a runner.

The question of alleged black athletic ability due to innate causes is of general interest because it goes directty against the liberal bigot claim that innate behavioural differences between races and sexes  are at best minimal and at worst non-existent. The fact that  liberals  are so willing to breach their supposed golden ideological rule demonstrates that it is not a rule based on any solid belief let alone being factually correct,  but merely propaganda.  That the claim  should remained untested by serious academic research is disturbing.

The police are effectively colluding in violence

The police are effectively acting colluding in violence

By the use of “kettling” the police are ensuring that the violent elements amongst demonstrators can best attain their ends.  Groups such as Class War use the following  technique to maximise violence. They put members willing to start the rough stuff at the front of a demonstration to act as a vanguard. Other members are dotted about in the crowd to both give the impression the demo is generally set for violence and to incite others around them by example.  At the back of the demo is another wad of members to act as a rearguard to stop the demonstrators retreating.   That is the ideal.  If  there are not enough to people to meet the ideal most or even all will be put in the vanguard.

“Kettling” does much of the violent elements  work for them.  It traps people in a restricted area so that the violent elements can forget about providing a rearguard because no one can leave the demo.  Those in the crowd not naturally inclined to violence will become more so as their anger at being trapped rises and conditions more fraught. When violence does take place  in a confined and crowded space, it is difficult for  anyone not to become involved simply in self-defence . Because no one can leave the area,  the premise on which English law’s self-defence  is based – reasonable force including the need to retreat at the first opportunity from the violence or threat of it – is removed. 

The police must know all this. That being so,  their continued use of “kettling” begins to look like a deliberate attempt to provoke violence. That in turn makes them look like agents of the state, a fact recognised by  Sir Hugh Orde,  president of the Association of Chief Police Officers and erstwhile Chief Constable of the Police Service of Northern Ireland (PSNI).

“Asked if there was a danger to the police’s reputation by repeated clashes at demonstrations, Orde told the Guardian: “Yes, if it is allowed to be played as the cops acting as an arm of the state, delivering the elected government’s will, rather than protecting the rights of the citizen.

“We need to be clear we are doing it as operationally independent, and not subject to influence by anyone as to how we do it.”  http://www.guardian.co.uk/uk/2010/dec/10/police-tuition-fees-protests-orde guardian.co.uk, Friday 10 December 2010 20.58 GMT

The implication of what is happening because of police tactics  is that any large-scale demonstration can be manipulated by the police to produce a violent response whilst at the same time allowing the violence to be contained within an area chosen by the police.  It is like a stage play being mounted with the police as the director. As violence  does not play well with the general public ,  any serious attempt to protest can be discredited if the police choose to act in this way.

The other effect of “kettling” is that groups who wish to join a demonstration cannot do so. This can in itself result in violence, or as an excuse for violence,  as was seen on Thursday 9 December when demonstrators  intent on going to Parliament Square filtered out instead to the Trafalgar Square/Regents Street area when they could not gain access to Parliament Square, an episode  which eventually resulted in an assault on a car carrying Prince Charles and his wife.

There is also the question of  the civil liberty not only to demonstrate but to move freely about.  Many people get caught up in demonstrations without meaning to as they go about their private business. Many more find that they cannot go to areas they want because “kettling” has occurred. Nor is it acceptable that demonstrators who wish to leave a demonstration cannot do so. Whether what the police are doing is illegal after the raft of authoritarian laws passed by the Blair and Brown governments is debatable. What is not debatable is the need for people in a free society to be able to move about freely.

The behaviour of individual policemen at demonstrations is also increasingly dubious. I think back to the Countryside March which saw considerable violence by the police against marchers who were about as law abiding a group as you could find. To see officers dressed in riot gear, frequently  more than one at a time, savagely beating an unarmed  protestor is not a pretty sight, and all too often seems to be action not to prevent disorder  but to sate the anger and desire for violence within the officer himself.  Those who think that the police cannot be willingly confrontational should think back to the miners strike in the 1980s when serried ranks of riot police banged their riot sticks in unison on their shields and taunted the miners.  Violence and aggression by police officers  allied to “kettling” will dissuade many from going on demonstrations simply from fear of what might happen. That is not healthy in a supposed democracy.

We are approaching a crunch point. If this type of policing goes on, large scale demonstrations will become increasingly difficult to mount  both from the point of view of public order and as meaningful vehicles to change public opinion. The danger is that large-scale demonstrations in Britain will go be default from being part of the democratic process.

Those who decry violence at demonstrations should reflect upon the words of the historian Lewis Namier who described the government of 18th Century England as “Aristocracy tempered by rioting”. There is something of that in every country and time and a great deal of it in modern Britain where the social elite have re-established a very firm hold on politics .  In England for more than a century  mass violence has been rare. If it is becoming common now it says much about the state our politicians have reduced the country to.  People are becoming desperate. That is the message the likes of Cameron and Clegg should take from what is happening.

LibDems make a mockery of elections

57 LibDem MPs were elected in 2010; 57 signed a personal pledge before the election to vote against rises in tuition fees. Yesterday 21 voted  against rises in tuition fees and 6 abstained.  The rest voted for the rise.  What is the point of elections?

The LibDem arguments put forward by the likes of Vince Cable to justify the betrayal are thin to the point of transparency.  To argue that their pledges only applied if they obtained an overall majority is absurd,  because no LibDem candidate could have rationally believed that their party  would achieve such a result , their party having never obtained more than 62 seats in a Parliament of 650. Moreover,  during the election their party leader  spoke only in terms of being part of a coalition, vide his commitment to speaking first to whichever of the Tories or Labour gained the most seats.

The argument that as part of a coalition they had to compromise would be feeble if they had not signed a personal pledge and would merely illustrate the cheat on electors which is any coalition government. With a personal pledge it holds no water at all. It is also probable that they could have made it a condition of the coalition that fees were not raised,  for Cameron gave away a good deal of ground in the coalition agreement. That  and the fact that the amount saved on tuition fees was comparatively minor in the context of the overall government spending and deficit, suggests that the LibDem leadership were at worst content to go along with Tory wishes and at best positively in agreement with the policy .

As for claiming that the extent of the financial difficulties was not known before the election, this is simple nonsense because the  Brown Government  published estimates of the shortfall between tax raised and money spent for this financial year and future years which have not been radically revised since the election. Nor was the present  Euro fiasco a post-election event.

The tuition fee betrayal is a symptom  of a general castration of British democracy.  Vast swathes of policy – immigration,  agriculture, fishing,  trade treaties, competition policy – have been passed wholesale to the EU and many other areas such as social policy, health and safety and justice are partially lost to the British Parliament.  Add in the trade treaties the EU commits Britain to and the multifarious bilateral treaties Britain has such as those relating to the UN and Kyoto, and the amount which any British political party can sincerely offer the electorate is already severely limited with estimates of Westminster legislation deriving from the EU ranging between 40-80%.  

Add coalition government to this emasculated British political situation and any meaningful democratic control has gone for all any coalition does is use the excuse that they cannot implement their election manifesto because they do not have an overall majority. That allows them to make any promise before an election and renege on it afterwards.  That might not matter too much in Britain where coalitions are rare under first past the post, but if the Alternative Vote (AV) referendum is won next year, what is happening now is a taste of what will become the norm because coalition is the most likely outcome under AV.

If elections are to have any meaning and electors are to exercise any control over governments, there needs to  be a requirement for candidates before an election to commit to a position on all the major issues and to be held to that position after the election, with electors having the power of recall if a pledge is broken. This would break the pernicious power of whips. As for governments, if a government  wants to introduce a policy which is not in their manifesto there should be a requirement for a referendum. If a government is a coalition, a policy would need to be in both manifestoes to go ahead without a referendum.

As for the EU and other treaty restrictions, there should be a requirement that any policy adopted or not adopted because of treaty restrictions should  be publicly acknowledged by politicians to alert British voters to exactly how much sovereignty has been lost.  There should also be a mechanism to force  politicians making claims which are patently false because of our treaty obligations, for example,  Gordon Brown’s “British jobs for British workers” and claims that immigration can be controlled while we are in the EU, admit their falsehood. 

Britain is also in dire need of a written constitution which underwrites the necessary conditions for a meaningful democracy, especially the need for free expression which is under ever increasing attack.

Tuition fees and Coalition lies

The coalition are floating their penal proposals for student funding on several lies.

Lie 1. The tuition fee  debt  will not affect the ability to get a mortgage because the tuition fee debt will not  be collected if a person’s income falls below the minimum contributory figure which is set to become £21,000.

This is a lie  because (a)  if the person’s income is above £21,000 (and any first-time  house purchaser’s income will have to be substantially above that),  the amount paid on the student debt reduces their disposable income, a fact which will be taken into account by any mortgage provider, and (b) the unpaid debt increases year by year as interest and inflation uprating are applied.

Lie 2. That the system is fairer than a graduate tax, because if a graduate tax was applied it could be evaded by working abroad, something particularly likely in the case of foreign students studying in Britain.

This is a lie because, although in theory true, the reality is that under the proposed system of tuition fees, there will be no means in practice of ensuring  those who study in Britain and then work abroad of pay their debt.  (This applies to student maintenance loans as well as tuition fees.)

Lie 3. That the average graduate earns much more than a non-graduate over a working lifetime.

This is a lie because the projection is made from historical data. When the argument was first used it was claimed that the figure was £450,000 not £100,000. The reason it dropped was beautifully simple: the £450,000 figure was based on data from a time when far fewer people went took a degree (less than 8% in 1970 and 43% now)  and a degree was scarcer and consequently more valuable.  It is likely that the £100, 000 figure will be lowered further as the earnings of recent graduates become more prominent in the projections.

It is worth adding that even £100,000 is a pitifully small reward for it works out at £2,500 pa over a 40-year career.  Moreover,  those  additional earnings are before tax.

Finally, there is already solid statistical evidence that arts degrees and what the public likes to call “Micky Mouse degrees”  such as media studies provide  no additional earnings.

Lie 4 That the debt will not put people off going to university.

This is a lie in the sense that the coalition cannot have any certainty of the claim’s truth yet present the claim as objective fact. While it is true that to date tuition fees have not reduced the willingness of people to go to university,  the massive increase in fees and the  rising cost of living necessitating further borrowing  will easily produce total debt  per student in the region of £40,000. There must come a point where the disincentive effect kicks in. In  addition,  would-be students have increasing knowledge of the travails of students who have already been burdened with debts and the falling monetary value of a degree.

Lie 5 That the proposed fees are fair because it is unfair to expect those who do not go to university to pay for those who do.

This is a lie because our taxation system is based not on any concept of hypothecated taxes (taxes for a particular purpose),  but on a central treasury which is used as elected politicians decide. This means that there are any number of instances where people pay taxes for things they do not approve of or do not directly benefit from, for example,  the childless paying for the children of others, the non-motorist paying for roads and  the pacifist paying for armed forces.  If the coalition was consistent on this claimed principle they would insist that only those who benefitted from school education paid for it.

Lie 6 There is no alternative to such  tuition fee increases to funding the present level of  higher education.

A straightforward lie.  What the coalition means is they do not choose to use any of the alternative measures.  These include:

1. Ending Foreign aid – a saving of £9 billion pa.

2. Reducing the per capita Treasury funding to Scotland, Wales and Northern Ireland to that of England – saving £15 billion pa

3. Raising basic income tax by a penny in the pound – additional tax raised of £3 billion pa.

The other alternative would be reduce taxpayer funded degrees to 20% of  school leavers (Germany has only 25% at university).  That would allow full tuition fees to be paid and a maintenance grant to be paid.

How British higher education became corrupted

Education is a first rate example of how quasi-commercialism can corrupt. It was a pincer movement from the bottom and the top, from schools to universities. Prior to the end of the 1980s our universities had been funded for decades by the University Grants Committee (UGC) which was made up academics. The UGC received an annual sum of money allocated by the Government to higher education. The UGC then allocated this  to the universities. This was not a perfect system because the academics tended to favour the older universities over the older regardless of performance. However, broadly speaking it worked and most importantly there was no pressure on universities to tout for students regardless of quality. This in turn meant that academic standards were maintained. Indeed, the newer universities were very sparing in their granting of degrees because they wished to build their academic reputation.

The Thatcher Government changed all that. They first cut in real terms the funding of given to the UGC, then abolished the UGC in 1987 to be replaced by the University Funding Council (UTC) which was manned not by academics but businessmen.  The money was then primarily attached to  the individual – a second criterion based on the quality of research was also introduced but it was the numbers of students which brought in the large majority of the money. This forced universities to actively compete for students. This might not have mattered too much if the numbers of students had remained static but it did not because the Thatcher Government began the push towards dramatically expanding student numbers without a corresponding increase in funding.  This meant that spending per student was reduced and universities had to get as many students as they could to maintain income.  That alone caused universities  to drop their standards, both in terms of who they accepted and the class of degrees they awarded, because universities with a reputation for high entry standards and strict marking of degrees risked being shunned for those with a reputation for being laxer.  To take on stark statistic: in 1970 less than 40% of degrees awarded by British universities were firsts and upper seconds: the figure for these classes of degree awarded in 2006 is over 60%. 

The massive increase in student numbers from the late 1980s meant that the average quality of student was lowered. This is not a subjective judgement.  IQ  is  distributed within  the  British  population approximately as follows: IQ below 90 25%, IQ 90-110 50%, IQ Above 110 25%. In 1970 less than 10% of school-leavers went to university. They could all comfortably come from those in the 111+ range (they will not have done but most would). Raise the numbers to the current level of around 40% and as a simply matter of arithmetic, many must have IQs of less than 111 and because a significant part of those with above average IQs  will not go to university, there must be significant numbers now going to university with IQs below of 100.  Degree courses had to be lowered simply to cater for the less able. This was done in three ways: traditional degrees became less demanding; a swathe of new subjects such as media studies and tourism were granted degree status and the standard of marking was relaxed. The result has been a reversal of the situation when roughly a third of students obtained firsts or upper seconds to a situation now where two thirds receive a first or upper second.    

Because the increase in student numbers has not been met by a proportionate increase in state funding, staff-student ratios have increased, teaching time for each student reduced, both in terms of direct instruction and the time available to staff for marking.

To these attacks on university standards were added eventually the toxic effects of the poison injected into the opposite end of the education  system. “Progressive, child-centred education” really gained a hold in the 1960s. Anti-competitive and ideologically driven, the grammar schools were first almost destroyed, ironically rescuing the public schools which were on their financial knees by the mid-sixties because of the drain of middleclass pupils to free grammar schools, and teaching  methods gradually corrupted so that children were not challenged over errors and all opinions (at least the politically correct ones) became equally valid”.

The progressive ideal was greatly furthered by the introduction in the 1980s of a single school-leaving exam (the GCSE) to replace the CSE and O Level’. Had assessment remained entirely by final (synoptic) exams, The introduction of the GCSE would still have been mistaken because no  examination can meaningfully assess  the broad range of ability displayed by those who sit it – there has been a tacit recognition of this by the inclusion of questions and course tasks of different difficulty within a GCSE subject and candidates can choose to do the hard or the easy and this is reflected in their grades. The exam consequently says nothing about the standard of the candidate as such because the mark tells you nothing about the difficulty of the tasks attempted: for example someone taking just the harder questions in an exam  could score the same mark as someone attempting only the easy questions.

Mistaken as the exam was in principle, it was further damaged by the inclusion of substantial amounts of coursework – cue plagiarism and third party out-of-school help – and coaching by teachers, licit and illicit (the licit includes teachers being able to take an initial piece  of coursework by pupils and making suggestions for  its re-writing) and the use of modular exams (exams which tested only part of the course) which can be retaken several times during a course.

The school examination system has been further contaminated by the various examination boards becoming nakedly commercial bodies who compete greedily for candidates. The result is similar to that experienced by universities: standards have been dropped to attract business. The old practice of setting percentages for those gaining a grade and for those passing was dropped allowing any number of people to gain any grade.  Freed of this constraint grades have inexorably risen year after year for both GCSEs and the university entrance A Levels. So bad has the inflation become that A* grades had to be introduced because A grades were so plentiful that they allowed no distinction to be made between the better candidates. Predictably, the A* grade has now met the same fate as the simple A.

Finally, because so many more pupils were taking GCSE than O Level, the standard of the exam had to be reduced for the same reason that the standard of the degree was reduced: the number of less able students taking the courses increased dramatically. The dire failure of GCSE began to be acknowledged by even the Blair Government with first the Education Secretary Alan Johnson announcing that coursework would be reduced in some subjects and abolished in a few such as maths (the Times 6 10 2006) and then a junior education minister Lord Adonis announcing that consideration was being given to allowing state schools to substitute the international GCSE (IGCSE) for the GCSE (Daily Telegraph 25 10 2006). The IGSCE is an exam closer to the old O Level and is taken by pupils outside Britain and increasingly by private schools in Britain.

The upshot of all this is a decline in academic standards generally. The decline of GCSE standards meant A Level pupils began their A Level courses less well prepared than they had been previously which meant A-Levels had to be reduced in difficulty which meant that those arriving at university were less well prepared and the degree courses had to be made easier.

A further  pernicious consequence of the  gigantic expansion of university numbers is the abolition of  student grants and the imposition of tuition fees. This is not only discouraging students from poorer homes – there is now a lower proportion of workingclass in the British university population than there was in the 1960s – and leaving most students with considerable debts, but also creating a mentality amongst students, politicians, educationalists and indeed the general public, that education is only a tool to obtain a better job, that it has no general value.

The irony is that even at the economic level this mentality is at odds with reality.  Successive governments have claimed that the lifetime earnings of a graduate are on average £450,000 greater than that of a non-graduate. This may have been true of graduates before the great expansion in student numbers but it is not now. The £450,000 has been revised to £100,000, a pretty small sum divided by the 40 years of the average working life. Of course that figure, even if it is true, hides a multitude of difference, with some degrees being next to worthless either because of the subject or the class of degree obtained.

What should be done? Ideally we should return to a system whereby students have their higher education fully funded and a maintenance grant paid.  This could be done by reducing the percentage of school-leavers going to university at the taxpayers’ expense to 20%. Mad you say? Well, Germany, the most successful European and arguably First World economy sends only 25% to university. Nor am I saying only 20% of school leavers should go to university in Britain, merely that the taxpayer should only fund 20%. There would still be opportunity for a would-be student who did not qualify for state paid-for degrees to fund a degree themselves, either on a full or part-time basis. The quality of degrees should also be improved by withdrawing state funding from what the public quite rightly thinks of as “mickey-mouse” degrees. The quality of school exams also needs to be raised significantly to prepare students for university.

 I said that would be the ideal funding solution, but there is a very large fly in the ointment: the EU. As things stand any prospective student legally resident within the EU has to be educated at British universities on the same basis as British students. The reintroduction of free university education and maintenance grants for British students would have to extended to EU residents as things stand. (It is worth considering in the context of EU interference in our affairs whether  the reason why tuition fees were introduced and maintenance grants abolished was because of the cost of educating non-British EU students. I rather suspect it was). The answer would be, as in so many things, to leave the EU and be once more masters in our own house.

 Would a reduction to state-funding for only 20% disadvantage the poorest students? It could conceivably do that if selection procedures are left as they are because they will still unfairly favour the middle-classes because they tend to get the better tuition at school.  How can this be avoided? By using IQ tests as well as A-Level or equivalent qualification results to determine entry. This would allow universities to meaningfully assess the abilities of students from different background. For example, suppose the choice was between someone from a public school with three As  and an IQ of 120 and a pupil from a comprehensive with a bad educational record who has three Bs and an IQ of 140, it would make perfect sense to take the comprehensive pupil because they would have the much greater potential.

As I write this I can hear the politically correct chanting their favourite anti-IQ tests mantras of “IQ tests only test how good you are at IQ tests” and “There is no correlation between IQ and academic achievement”. The answer to the first is that you might as well say that maths exams only tests maths or English exams English.  IQ tests test that part of the intellect which is the most useful but not comprehensive guide to a person’s intelligence. Nor am I suggesting that it should be the only criterion, a certain level of academic attainment also being required.  The answer to the second is simply, IQ is a necessary but not sufficient condition for academic success. If you have an IQ of 1590 you may or may not take a first in maths at Cambridge: if you have an IQ of 80 you will never take such a degree.

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