Monthly Archives: March 2011

Most people cannot make provision for the future

Cameron’s  Big Society is predicated on the idea that people are generally able to provide for  themselves.  This is clearly not the case in vital  areas such as healthcare, education and pensions, not least because most people do not earn enough to pay for such things for themselves and their dependants.  Nor, particularly in the case of saving for old age, is it reasonable to expect most people to do so wisely even if they can afford to invest.

To expect the vast majority of human beings to be expert enough in financial matters to make wise private investment decisions is absurd,as absurd as expecting every man to be his own lawyer. Therefore, all but a few of us will turn to supposedly expert advisors for advice. The problem with such people is twofold: they often have a vested interest  in selling or promoting a particular product and even when they do not, they are frequently bad judges of the financial future. (If investing was easy and certain for the so-called experts, all financial institutions would be permanently hugely successful).

When someone sells you a private pension plan or insurance, he does not do it out of the goodness of his heart. He does it because he earns a commission or fee from it. As the pensions mis-selling scandal of the Thatcher years showed, that incentive drives many, probably most, financial service consultants to sell the product most beneficial to their income rather than to the customer.

The customer can also get misled if he takes reputedly independent advice, whether this be from a self-described independent financial adviser or out of the financial pages of newspapers and magazines or investment newsletters. The advice given may be anything but independent. Unbeknown to the client, an advisor may get a commission for recommending an investment and media share tipsters often have no scruples about recommending shares which they know to be poor performers, either because of direct inducements from the companies or because they work for a company which gets business from the sharetipped. Share tipsters can also make a profit by “ramping up” a price in shares they hold by recommending it or depress a share by criticising it and then buying at the depressed price.

Those recommending shares or financial products are in a wonderful position: they can tip to their heart’s content without taking any responsibility for their tips. No tipster has a consistent record of predicting successful investments. Quite a few have utterly dismal records over years. Indeed, so poor is their general performance that one might ask whether it is any worse than randomly selecting investments. It may even be worse. As Woody Allen once remarked, “A stockbroker is someone who invests your money until it is gone”.

The Daily Telegraph put the matter of share tipping to a sort of test in 2001. It employed a professional tipster, an astrologer and a four year old child to notionally invest £5000 in the stock market. The professional tipster applied his supposed expertise. The astrologer selected her shares using her star charts. The four year old child chose by repeatedly tossing (at the same time) a number of pieces of

paper in the air with the names of shares written on them. At each toss she caught one. After a year all the investments had lost money, but the four-year-old-child lost least, followed by the astrologer with the supposed financial expert bringing up the rear quite some way behind.

A rational examination of the actual performance of tipsters and advisors could only lead to the conclusion that predicting the future economy is a mug’s game. Why would an expert do worse than a four-year-old child and an astrologer? Well, it could have been a fluke, but an unlikely one as both the child and the astrologer did better. More probably the financial advisor’s knowledge is a positive hindrance. A parallel is with the football pools. Many people have a very considerable knowledge of the form and general state of professional football clubs. Yet these people do not appear to be any better at predicting results than the punter who knows nothing about football and does the pools by putting a pin in the matches or has fixed numbers.

The truth is that no one can guarantee investment for a secure future or even come anywhere near to it. All calls for private provision replacing public in whole or part should be placed in that context.  Not only that but account has to be taken of the great variety of abilities found in a population.   IQ is distributed so that around ten per cent of the British population have IQs of 80 or less.  An IQ of 80 is the level which most psychologists working in the field of intelligence testing judge that a person will struggle to live an independent life in a sophisticated modern society.  Add in the differences in education, social status and wealth and the idea that most people can make their own provision for a pension becomes unreasonable. Take into account the high cost of living, especially the ever rising cost of housing and raising children, and falling pay and  it becomes farcical. 

As for the broader  idea that  individuals should, if they have the means,   pay for their healthcare, education and   insurance to cover periods when they are not working,  to expect all but a small part of the population to do is clearly nonsense when the average annual pre-tax UK  income is around £26,000 with many earning below £15,000.

Politically incorrect film reviews – Gran Torino

 Run time  116 minutes

 Main cast

Clint Eastwood as Walt Kowalski

Bee Vang as Thao Vang Lor, a young Hmong teenager

Ahney Her as Sue Lor, Thao’s older sister

Christopher Carley as Father Janovich

Doua Moua as Fong “Spider”, Thao’s cousin, a Hmong street gang

 Director Clint Eastwood

 At one level Gran Torino is enjoyable as Dirty Harry at 80 for  Clint Eastwood reprises, probably for the last time, the persona which made his career, that of the menacing hard man – has there ever been a more convincing man with a gun on film?  He also looks in much better shape than he has for years and 80 years old or not, hes is still weirdly convincing as the tough guy.

But that is not what is at the heart of the film. Eastwood’s character is a Korean War vet  Walt Kolowski who has spent his working life in skilled manual labour. He lives in a street  in which he is the only white man left, the rest of the street having been colonised by Laotian hill people known as Hmong.  Eastwood starts off by displaying what liberal bigots fondly imagine is racism: he is indignant at having his territory invaded. Yet even in these early scene setting moments he is never what would have been called racist even thirty years ago. He is simply bad tempered and unwilling to engage with his unwanted neighbours.

All of this miraculously changes. He is soon seen rejecting his own children whom he views as being symbols of the soft corruption of traditional American values, although there is precious little justification for this view provided in the film . Then he befriends the Laotian family next door and is almost immediately wondering to himself how it is that he feels he has more in common with  them than he has with  his own family, the pc moral being that the Laotian immigrants have become the inheritors of traditional American values.

The rest of the film builds upon this view as he mentors a young Hmong boy Thao in the ways of the American blue-collar worker including getting him a job. But Thao has a problem: a cousin “Spider” runs a local gang and is constantly badgering Thao to join the gang with a mixture of threats and inducements.

Walt sees that while the gang exists Thao is in danger of being dragged into its sphere. Eventually, in a Christ-like self-sacrificing moment, Walt allows himself to be killed by the gang to save Thao. The gang shoot him dead and are arrested for murder thus removing the threat to Thao’s future. The overall pc moral is that immigrants are good and will continue the American tradition as  soft corrupt white America declines. continue the American tradition as soft corrupt white America declines.

What shall we do about the old?

The most problematic of all public provision is what to do about the old. The value of actuarial calculations – the statistical analysis of risk based on instances of the risk occurring – made sense for pension calculations when life spans from generation to generation were fairly stable. Because of our ever increasing ability to cure and prevent disease and to provide a more materially certain livelihood for the majority, life expectancy in the future is no longer easily predicted. Even if the wilder extremes of SF are avoided, it is reasonable to assume a significant rise in life expectancy in the next forty years. The rise does not have to be dramatic to make a nonsense of pension provision made today – even a five year rise in the average would have dramatic consequences for pension planning.

A substantial rise in the average lifespan does not necessarily imply some major scientific breakthrough to slow or even reverse ageing. All that would be required is for scientific advances to reduce the diseases which kill many before they reach the average age of death. In other words, more people survive to the ages which are now the average lifespans. It is quite conceivable that within the next 40 years simply reducing early death could extend the average lifespan by ten years.

More dramatically, it is conceivable that science may extend human lifespans substantially beyond their current limits. Work on animals such as mice have resulted in greatly extended lifespans simply by restricting food intake from early in life. If human lifespans are extended greatly all pension bets are off. In such circumstances no meaningful actuarial prediction for pensions could be made for the odds would be that further, unforeseeable increases in life span would occur continuously after the initial scientific breakthrough was made. The fact that such scientific advances are possible in itself makes current pension planning hideously uncertain.

What should we do as a society to plan for the future lives of the old? Let us assume that average lifespans are extended simply through the diminution of early death rather than from any radical scientific discovery, what then? If the average lifespan of Britons rises to, say, 90, over the next 40 years, an obvious move would be to delay retirement. But that raises a problem. Most people could probably work to 70, but beyond that the incidence of severe but non-fatal disease rises steeply. Keeping people alive longer does not at present equal keeping them fitter. More 70+ year-olds means more people suffering from various forms of dementia, crippling diseases such as arthritis and people simply too physically weak to undertake work which could provide an income to support them. Hence, extending the retirement age, for both state and private pensions, is only a partial answer unless science advances enough to massively reduce the infirmities of old age.

It is also true that many people are struggling to cope with their job long before the current age of retirement. People in manual jobs cannot be expected to work to 70 and those in heavy manual jobs or those in jobs which require physical strength and fitness such as grassroots policing, are probably past useful employment by the age of 50, certainly by 55. In principle they can retrain to lighter work, but in practice this is very difficult. People who have spent their lives working with their hands in a workshop or in the open air often do not take easily to working in an office or shop. Moreover, the pay they will get from such “second career” jobs is likely to be low, which is both a disincentive to work and may leave the person unable to support themselves fully.

But even if a person can adapt to new ways or has been throughout their lives in the type of employment which can be carried on into old age, the odds are that they will struggle to remain in employment as they reach late middle age. Employers are prejudiced against the older worker for various reasons. Part of that reason is financial – the cost of employing them is high compared with a youngster – but it is also in large part to do with the adaptability and energy of the young compared with the old. In a time of ever increasing technological change the natural resistance to change and learning becomes ever more of a handicap than it was in the past. Government can pass whatever age-discrimination laws it wants but employers will still find ways to employ who they want to employ without falling foul of the law (short of a law which insists that a percentage of people in an organization had to be in various age categories).

However much as we may like to believe – and I write as a budding wrinkly myself – that experience compensates for youthful enthusiasm, the truth is that all of us become much less receptive to new ideas as we get older, energy falls, physical strength fails, our memory diminishes and concentration becomes harder. Consequently, employers  have good cause for employing younger people in most jobs. Of course experience does count and in some jobs can be valuable well into old age, but in most jobs it does not count for much after the age of 60. Even in “people” related employment, which the older person is supposedly better equipped to handle, experience may be a positive disadvantage. For example, suppose an employer wants to employ someone  serving the public. It may well be that the average customer for the business prefers to be served by someone young and employing the old would be the kiss of death for the business.

The position of the older worker is being further undermined at present by the high levels of immigration, both official and unofficial. Most of this immigration is of the young, much of it young males. These young workers will tend to take much of the work which would otherwise be available for the older Briton. Stop the immigration and employers will be forced to turn to British workers. It is as simple as that.

Even in the most benign likely circumstances – an extension of the average lifespan by five or ten years through the deduction of early death, it is clear that many people will require support for a very long period of retirement or reduced employment. Some of that may well come from private pensions and savings. But clearly for a very large part of the population adequate private resources guaranteed to support someone for 30 odd years will be beyond their grasp. Hence, state provision sufficient to allow people to live in old age is a must.

If great scientific advances are made which greatly extend life we shall simply have to start planning again from scratch. Obviously if average lifespan was increased to, say, 150, the whole perspective of a life would have to change. There are any number of exciting or disturbing possibilities. For example, it might be that only the newly conceived or newborn children could have their lives increased by a new treatment. We would then be in a position where that generation and succeeding generations had the increased life span while anyone born before the treatment became available lived to an average age of 90.

The other great concern about pensions is demographic. The population is ageing and the British birthrate is substantially below (around 1.7 children per woman) the replacement level (roughly 2.1 children per woman). The doomsday scenario is insufficient working people to pay the pensions of the old in the future. If we were talking about a demographic change which was going to take place overnight I would be worried. However, we are not. Rather, the demographic effects will be worked out over thirty or forty years. Past experience suggests that society will evolve to make the necessary arrangements. We cannot foresee what the birthrate will be in five years let alone twenty or thirty.

The currently fashionable solution for the future pension bottleneck – importing large numbers of young immigrants – would be no answer in the long term. The young people who arrived in this generation would eventually grow old and would need people of working age to support them which would mean more immigration which would mean more old people to support in the next generation and so on ad infinitum, a literal absurdity because any territory has a limit to the number of people it can support. In other words, confronting the problem of a demographic  imbalance would merely be delayed for a generation or two by immigration.

The most important thing is that we do not put all of our eggs in basket. It would be wise now for the Government to begin a state pension fund into which one per cent of GDP (currently around £11 billion) was put each year.  This fund would not be touched for 20 years at least and would be used to ease any future pension problem arising from a tax shortfall due to a smaller working population.

What a tremendously thoughtful fellow Dr David Kelly must have been

What a tremendously thoughtful fellow Dr David Kelly must have been.  He supposedly committed suicide by slashing his left wrist, but  had the good manners not to bleed too much in case it made  a frightful mess. Not only that, doubtless through concern that he should  not create any unnecessary work for the authorities,  he  managed to handle without leaving fingerprints the pruning knife with which he cut his wrist,   the  three packets of co-proxamol   tablets he took to kill the pain, the water bottle he used to take the tablets,  his mobile phone and his watch which he took off and left close to his body.  As for his failure to  leave a suicide note, this can surely only be explained by a career civil servant’s desire not to cause embarrassment or worse to the Government and his civil service colleagues.  

Well, that is the class of  tosh which the British public has  implicitly  been asked to believe since Kelly’s death. Unsurprisingly,  many people have doubts about whether that the death was suicide. The BBC broadcast a programme on Kelly on 25 February 2007 as part of the series The Conspiracy Files ( . The programme commissioned an Opinion poll to establish the views of the public on his death. 22.7% of those surveyed thought Kelly had not killed himself, 38.8% of people believe he had, and 38.5% said they did not know (  The doubters include the former Conservative leader Michael  Howard who in August 2010  called for the inquest to be re-opened (  and the Lib Dem MP Norman Baker  whose book The Strange Death of David Kelly was serialised in the Daily Mail before publication in November 2007.

 A group of doctors who  have been trying since 2004 to get  the inquest which was adjourned before the Hutton Inquiry  resumed .  In December 2010 they submitted a petition to the Attorney–General Dominic Grieve asking  for the inquest to be re-opened. (

Grieve asked for additional information and the doctors (Stephen Frost, Christopher Burns-Cox, David Halpin and Andrew Rouse)  submitted this to Grieve at the end of February 2011. ( The additional  information, obtained by using the FOIA,  confirmed the lack of fingerprints on the knife,  drug packets, water-bottle, watch and phone.  The absence of fingerprints was not raised during the Hutton Inquiry , nor were any of the five items introduced as evidence.

The absence of  the fingerprints produces evidence that Kelly did not kill himself which is in a different category to all the other objections which have been raised. These  are either matters of opinion or rely on circumstantial evidence such as the failure to introduce seemingly pertinent and important evidence into the Hutton Inquiry . Medical experts may argue over such things as whether the loss of blood together with the ingestion of co-proxamol tablets and moderate heart disease were enough to kill Kelly;  whether the half litre water bottle out of which approximately half a pint of water had been drunk was enough water to swallow 29 tablets or whether Kelly was capable of using his right arm to cut himself because of he had broken it some time before his  death and it had not healed properly (

As for what appears to be a blanket  desire on the part of the part of the Blair Government and all those officially associated with the death – the Lord Chancellor, the Oxford  coroner, Lord Hutton, the pathologist who conducted the post mortem and so on – to prevent an  inquest and/or  ensure that the Hutton Inquiry could have only one result, namely, that Kelly committed suicide, that in itself does not mean their motives were to prevent the discovery of a murder for there could plausibly be other reasons. Suppose, for example, at Kelly had received credible death threats from a security agency either foreign or British.    

The reported absence of fingerprints, if it is true,  is a fact. It cannot be gainsaid or argued away. Because no gloves were found at the site where the body was found, Kelly’s  fingerprints  should have been on these items, especially the knife which he must have held for some time if he committed suicide  because his  left wrist showed a number of cuts and cutting an artery in the wrist requires a fair degree of strength and perseverance.

Where does this leave us? Investigation work is best done by sticking to the hard facts and then following the logic from them to possibilities. The central  hard fact in this case is not that  Kelly’s  fingerprints were missing from the five objects , but the fact that the British authorities say they were not  on the various objects.  This gives us two possibilities, that the authorities are telling the truth or lying.  If they are lying  we are left with these possibilities:

1. Kelly’s prints are on all or some of the objects but there is some reason, such as someone else’s prints being on some or all of the items, especially the knife, for saying Kelly’s prints were not on them. This might seem odd but think about it. If there are other prints,  to admit that Kelly’s prints were on them would  open the way to admitting that other prints had been found. That  would be difficult going on impossible to explain if they were the prints of anyone other than those who had who might conceivably have handled  them shortly before his death. Kelly’s  wife would probably be the only person who falls into that category.  The worst case scenario for the authorities would be the finding of a third party’s prints which were identifiable as those of either a known hitman or an  agent of a security service either British or foreign.  If Kelly’s prints and those of a stranger were found, the suppression of the  evidence would potentially require criminal behaviour – perjury, perverting the course of justice, forgery – on the part of those who tested for prints and those who knew what had been found.  There would also be the problem of the possibility that the objects might be the subject of independent testing at some future date. The authorities  would then have to decide whether to wipe or destroy the objects.  

2. Kelly’s prints are on some but not all of the objects. For example, he might have been forced to take the co-proxamol.  This could have resulted in  fingerprints on the water-bottle and the packets of co-proxamol or simply fingerprints on the water-bottle if the killer(s) took the tablets from the packets and gave them to Kelly.  If the killer(s) then slashed Kelly’s wrist it is plausible that whoever did it cut a number of times with ever deepening cuts because they were unsure of how to do it. (It would be interesting to see the angle of the cuts. It made by someone other than Kelly they would probably be at an angle Kelly could not have achieved. The most probable mistake made by someone cutting Kelly’s wrist would have been from the left hand side because that would be most convenient. )  The fact that the watch has blood on it would fit in with this explanation,   because having blood on it after it was removed from the wrist suggests that whoever cut Kelly’s wrist  began cutting with the watch on, then took it off when they found it impeded the cutting. This could also explain why a number of cuts were made. Alternatively, if Kelly’s prints are on the knife, he could have been forced to make the cuts.

3. Kelly’s prints are on none of the objects,  but the prints of other people are.  This could mean that Kelly was restrained when taking the co-proximal tablets and the packets were opened by his killer(s) who put the tablets into his mouth then fed him with water to facilitate swallowing.

There remains the possibility that no fingerprints are on the items.  If so, that would mean the killer(s) did what that  described in (3) but wore gloves.

The objects, if they still exist, should be subjected to independent forensic testing.  Apart from determining whether there are any prints, this could potentially show if the items were wiped to erase prints – examine them under high magnification to look for wipe marks; test for chemicals which would indicate cleaning – and allow a check for DNA.   Even if the items were DNA checked at the time of death,  and I have been unable to find out whether they were, the technique for extracting useful DNA has advanced considerably since Kelly’s death and minute amounts of material can now be used.

If it was a murder why were so many loose ends left untied? The favourite explanation would be simple incompetence. The killers remembered not to leave their own prints but forgot to put Kelly’s prints on the knife etc. It does not do to imagine hired killers always behave as they normally do in films, that is, calm and calculating with no tendency to panic.

 If you want a Machiavellian explanation here are a few. The “suicide” might have been  deliberately botched to either embarrass the British Government or to send out the message to others “behave or else!” . Alternatively, suppose the murder was committed by a friendly power, for example, the US or Israel, who wished to disguise their involvement by introducing a bogus incompetence into the affair. Or how about introducing the incompetence simply to confuse matters so that  a number of  potential agencies with differing motives might be suspected?   It might even be that the murder was carried out by the British security services, but they were not  happy with doing it  and deliberately botched the job  in the hope that  the public would see it was a killing not suicide.

The thing we do not know is what was the cause of Kelly’s death.  The slashing of the wrist and the co-proxamol tablets could simply be a blind to cover another way to  death, perhaps by some difficult to identify poison.  This is suggested by the evidence of the doctors who have expressed doubts about whether the loss of blood, the co-proxamol and the heart condition would have been sufficient to kill Kelly. It could even  be that Kelly was abducted  and the shock  of either being forced to cut  his wrist or having it cut for him caused him to die.  This could explain why little blood was lost.  It could even be that the true cause of death was found and has been suppressed.

As for a motive for murder, it  makes no sense to try to assign probabilities to whether Kelly did or did not represent a threat to  the British Government or any other government or group because we do not  know.  What we do have reason to believe is that he did not die as the official version says. If the absence of his fingerprints on the five objects is true then someone must either have killed him or interfered with the evidence after his death. Either way that does not point to an innocent self-contained suicide. 

It is not certain that Kelly was murdered. What is certain is that the Hutton Inquiry was a woefully inadequate investigation into the man’s death.  An inquest is the least which is required. Kelly’s body was buried not cremated so a further post mortem could be carried out prior to an inquest. Amongst other things, another post mortem might give a certain answer to whether Kelly had the strength in his right arm to make the cuts which supposedly killed him.

All British banks are “too big to fail”

The media is alive with politicians, bankers and economic commentators saying British banks must be broken up so they are not “too big to fail”.  The Governor  of the bank of England  Mervyn  Kingof England Mervyn King was at it last week (htttp:// and the new chief executive of Barclays, Bob Diamond, has had his say today. (

The idea is a literal nonsense statement. To begin with the whole of economic history shows that a run on any bank above the size of a local bank with one or two branches is likely to spread the contagion to other banks. Indeed, even runs on small banks can have a snowball effect bringing ever larger banks to default as the nexus of borrowing and lending unravels. This is what happened in the USA during the Great Depression when their highly fragmented banking system saw the phenomenal number of approximately 9,000 banks fail before the America’s entry into the second World War in 1941 finally broke the economic spell with the sudden need for vast amounts of servicemen and war-related materials driving down unemployment.

Britain’s present position is different from that of the USA in 1929. None of her banks are really small for even the smallest building societies which converted to banks in the past twenty-five are far removed from a local bank with half a dozen or fewer branches. Not only that, but the ten largest banks control 90% of the UK banking market ( This produces two difficulties: the danger of a wholesale collapse of confidence in banks is greatly amplified because of their size and the damage done by a failure of any of them would be both great and immediate. For example, suppose Barclays was simply allowed to fail. It is inconceivable that the failure would not lead to a run on all the UK banks.

Those saying banks should be reduced in size so they are not “too big to fail” have a further hurdle to pass beyond that of the lessons of economic history. The internationalisation of banks makes the idea of governments forcing banks to become “small enough to fail” impractical. For example, how would a government force an international bank to split off its British banking from the international business? Unless this could be done, the contagion might well start overseas and spread to the British banking end. The same general objection applies to the idea of splitting retail from investment banking. If an international bank refuses to do it there would be little a British government could do because they could not afford to say do this or cease trading in Britain. But even if the international problem could be miraculously overcome, it is difficult to see how the UK parts of banks such as Barclays could be split into different parts small enough to be “allowed to fail”. Divide Barclays into ten separate companies and each part would still be large.

It is also difficult to envisage a situation whereby a British government would cease to guarantee deposits up to a sizeable or withdraw entirely from its position as lender of the last resort. The continuation of those two engagements would amount to a great deal of moral hazard remaining.

Most fundamentally, whatever system was put in place; whatever political commitments were given, if a run did begin on a British bank it is most improbable that a government faced with the reality of such a failure, with the threat of contagion spreading to other banks, would fail to step in. The only way to stop the bankers running riot again is to nationalise the banks. Fail to do that and we are likely to have a re-run of the present disaster in the not too far distant future because already the banks and their ilk are behaving , as far as present circumstances allow, much as they did before the failure of Lehman Bros in 2008, dreaming up new types of complicated derivatives, paying themselves grotesque amounts of money and laughing at those outside their magic insiders’ circle.

Who should be allowed to strike?

Some public service workers do not have the right to strike – the police and the armed forces. Is it unreasonable to deny them this right? I think most people – myself amongst them – would say no. They would see that the right to strike has to be balanced against the public good of having the streets policed and soldiers, sailors and airmen who will be unquestionably available to provide national defence and to attend to national emergencies.

If we decide as a society that the police and servicemen cannot strike, there is no reason in principle why the removal of the right to strike cannot be more widely extended for we have already decided it is not an absolute right. The question is how far to extend the denial of the right.

There is a case for a general ban on striking by public service workers because they are funded by the taxpayer and ultimately responsible to the taxpayer or at least the electorate. But before any such ban could be reasonably considered the general pay and employment conditions must be made fair and secure in the manner described in the previous section – their pay and conditions would have to be such that the majority of the population would think them reasonable. That would leave the problem of union action over unfair dismissal or other disciplinary action, but it is difficult for a union to argue that there is not adequate recourse through Employment Tribunals or, if the union wishes to fund a case brought by one of their members, through the courts.

If a general ban is thought too severe, there is good reason to ban strikes in those organisations which provide services which are both vital and immediately necessary. It would be difficult to argue that all-out strikes by NHS staff or firemen would cause less public damage and chaos than strikes by the police or servicemen.

Because of privatization,  there are also private companies whose employees in principle need to be banned from striking, particularly the utilities such as gas, water and electricity. That raises another objection to the placing of utilities in private hands: it makes action such as ruling strikes illegal for certain workers very difficult, even impossible in practice. The utilities being private companies, governments cannot control their wages and conditions of employment as they can those of public bodies. Or rather, they could do so, but then they would be taking so much of the control of a fundamental part of a private business out of its management’s hands (this would be in addition to the areas already covered by the various utility regulators) that two questions would arise: (1) could any private company operate under such constraints? and (2) if a company has to be so constrained by government, what is the point of it being a private company? The answer to (1) is probably no and to ((2) no point.

The real answer is to renationalize these vital services.

If the right to strike is removed those affected could be compensated by the introduction of  mechanisms to ensure they are treated fairly when pay and other conditions are decided. Pay might  be linked to the average national wage with wages rising or falling as the average wage rises or falls.  This would involve weighting different jobs as a percentage of the national average wage. For example, a senior civil servant might receive 400% of the average wage and a clerk only 80%.

Conditions are more problematic to solve by strict rules because of their diversity, but judgments based on comparisons with organisations not affected by the ban on striking could be used as a yardstick to decide what was reasonable.

Does the Welfare State corrupt?

One of the favourite arguments against social provision is that it corrupts the receiver by making them dependent and ultimately damages society by significantly reducing initiative and making people selfish. The facts do not bear this out as a general proposition although naturally  there will always be some free riders in a welfare state. Today we have a society in which the self-help gospel is constantly preached, people work longer and longer hours and most mothers work at least part time. This has produced a society in which the birthrate has dropped well below replacement rate. During the period when state provision was most heartily endorsed as part of the national furniture (1945-1979) the birthrate was above replacement rate. The ability and willingness to breed is surely the ultimate indicator of the health of a society.

But that is not to say all social provision is benign. It is one thing for a society to provide those things which most cannot be reasonably be expected to provide for themselves, but quite another to build dependency into the system. That is what has happened in Britain where more than half the population now draw some sort of public monetary support. Some of those benefits are part of the legitimate armoury of social provision, for example, child benefit, unemployment benefit, sickness benefit and old age pensions. Others are not.

The most pernicious of the current benefits is Working Families Tax Credit, which can be drawn by families with a household income of over £50,000. This is a scheme in a long line of similar ones dating back to the old Poor Law of 1601. It is the granting of state money to those in work. The best known Poor Law example was the Speenhamland System  of the 18th century which allowed outdoor relief to those (primarily agricultural labourers) whose wages fell below a certain level. The result was predictable. Where the scheme operated employers dropped the wages they paid to the level where the Parish (which administered the  Poor Law) made up the wages through outdoor relief to those whose wages were lowered.

The Speenhamland System was a subsidy to employers. So is the Working Families Tax Credit. All it results in is employers paying lower wages. That is not because they are all evil grasping men or women.

Lower wages are forced on all employers because there will always be a substantial number of employers who will take advantage of opportunity offered by any government subsidy to lower their wages. That means all employers must do so to compete.

Apart from the fact that it siphons off  large amounts of taxpayers money, Working Families Tax Credit is a pernicious form of subsidy because it makes employers who employ many low wage workers dependent on its continuance, which obviously cannot be guaranteed. Either a future British Government may decide to abolish it of their own free will or tax harmonisation within the EU may force them to do so.

If it is abolished, such companies will be left stranded because they will have to pay higher wages. Moreover, the subsidy they are receiving now will cause them to be less efficient than they would have been without it. On the other side of the employment coin, families receiving the benefit will also be left high and dry if it ends, for they will have altered their lives according to the income they have received. 

This type of structural dependency has evil effects beyond the economic because it can distort the democratic process. If sufficient people become dependent on a benefit such as tax credits they may make it next to impossible for any party wishing to be elected to propose its abolition because to have such a policy will drive anyone in receipt of the benefit to another party which supports its continuance.

The nation state: the only platform for democratic control

Democracy in the literal direct sense does not exist in the modern world, indeed for practical reasons cannot exist in a state of any size. What we have is what political scientists call elective oligarchy, a political system whereby the electorate is offered a choice ever few years between competing parts of a society’s elite.

That paints a dismal picture for the masses. However, even within an elective oligarchy, they can exercise considerable control given the right circumstances. What the masses can do and have done for most of the past century and a half in Britain is exert an ever increasing control over the elite through representative institutions. But they have only been able to do this because the representative institutions have operated within the context of the national state. Elites as groups have been forced to take heed of the masses because they relied upon their votes to be re-elected and the system worked by and large because the major political parties offered a meaningful alternative on the most of the great issues.

In the past thirty years our political circumstances have changed dramatically. Two things have happened. The freedom of action of the Government and Parliament has been greatly reduced and the political parties have become ideologically aligned.

Entanglement in the EU has resulted in a majority of British legislation ultimately originating not in Parliament but within the European Commission, while various treaties have removed whole swathes of political choice from the electorate, ranging from proper control over foreign policy and border control to the pursuit of a national economic policy. Most profoundly the European single market agreement and the GATT treaty arrangements and membership of the World Trade Organisation (WTO) have left British parties with no choice of economic policy, for as things stand they have to support the notions of free markets and free trade. Any party wishing to offer protectionism and state intervention in the economy cannot do it unless they commit themselves to withdraw from the EU and WTO.

The consequence of the our membership of the EU and our other treaties is that our politicians in practice can offer very little difference in policy to the electorate. And, of course, our politicians find it convenient to use our EU membership and other treaty obligations to excuse themselves from responsibility for unpopular measures or as justification for forcing through vast amounts of detailed legislation which Parliament, let alone the electorate, is barely aware is being passed into law.

The position is worsened by the careerism of the modern politician. This has always existed to a degree, but what we have now is of a different order of magnitude. The really depressing thing about the House of Commons now is the sheer narrowness of experience of the members, many of whom have never had a career other than their political one. Hence, once on the political career bandwagon they cannot afford to get off. The current bandwagon is the internationalist one.

Internationalism dissolves national sovereignty. The left may cheer this but they are discovering by the day just how restrictive international treaties and membership of supranational groups can be. As things stand, through our membership of the EU and the World Trade Organisation treaties, no British government could introduce new socialist measures because they cannot nationalise companies, protect their own commerce and industry or even ensure that taxpayers’ money is spent in Britain with British firms. As far as economics is concerned, a British government can have any economic system they like provided it is largely free trade, free enterprise.

The Right are suffering the same sickness with different symptoms. They find that they are no longer masters in their own house. They cannot meaningfully appeal to traditional national interests because treaties and EU membership make that impossible. Control of national borders has gone.

A reversion to nationalism need not be a party political matter in Britain, but the modern British left are unfortunately conditioned to believe that the national state is at best outmoded and at worst xenophobic, racist even. This ignores both the history of the mainstream British left and mistakes form for content.

The Labour Party for almost all of its existence has been strongly protectionist and hence de facto in favour of the nation state. Indeed, Blair in the late 1980s was still an economic nationalist. Moreover, for most of the time Labour has been consciously in favour of the nation state and of Britain’s independence – few could give the likes of Attlee and Bevin lessons in patriotism.

As for mistaking form for content, it is simply a matter of empirical fact that the nation state does not produce a uniform behaviour – take Switzerland and Iraq from the present day as examples of that. The idea that nation state equals aggressive, xenophobic, badly behaved warmonger is a literal nonsense. In particular, there is good empirical evidence that where there is significant democratic control within a nation state, this makes aggressive war much less likely than where a dictatorship exists.

It is also true that supranational bodies are not noticeably better behaved than nation states. Worse, they have a large element of the sham in them, being invariably dominated by the more powerful component states, for example, the UN being heavily manipulated by the USA and the EU broadly controlled by its major members. Supranational bodies are not simply vehicles for the normal process of power-mongering, but, in practice, that is their prime function. That they give a spurious appearance of international agreement and legitimacy adds to the ability of the dominating states within them to exercise control over weaker states by direct threats, the withholding of money and, most insidiously, the development of bureaucracies which carry forward the policies forced on the supranational bodies by the most powerful members. (It is often said that the UN has no power. This is utterly mistaken. It may not have an army but there is a vast web of agencies which allow a great deal of control and influence to be exercised over states which seek their assistance. Some such as the IMF and World Bank control client countries from the outside, while others such as UNHCR permit direct internal interference on the ground.)

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