The threatening implications of cryptocurrencies

Robert Henderson

Cryptocurrencies  are  best thought of as fiat currencies without a country backing them.   A fiat  currency  is  one in which the money is not based on a valuable commodity like gold or silver but on something of little or no intrinsic  value such as paper money  or coins made with base metal.   It is  made legal tender by law.  Its market worth is based on confidence, both domestic and international.   That confidence is a reflection both of how the currency actually performs,  the regulatory regime which governs the currency  and the general standing of the issuing authority which is normally a nation state. Cryptocurrencies have no national  or supranational body  (such as the EU’s  ECB) which can be held to account if things go wrong  because they are created by private individuals or corporations  and are as yet largely unregulated by governments.  Consequently,    they lack the reassurance which a stable and well run advanced  country  can bring.

Crypto- currencies are created in various ways. The   most famous  Bitcoin is supposedly based on a limit of 21 million BitCoins which can either be “mined” using complicated software,  IT expertise and serious  energy usage or bought from exchanges with real-world currencies such as the Pound Sterling or the US Dollar. Other cryptocurrencies  currencies  such as   XRP, which is owned by Ripple , creates a set number of coins and then sells them.  Fractions of currency units such as Bicoin can be purchased.

But however a cryptocurrency is created it has the obvious disadvantage that  only those who initiated the currency truly know  how it is being run or will be run in the future . They may claim that only a certain number of currency units are being created or are available to be mined but no one knows if that is so now or will be  in the future.

Volatility

To these potential drawbacks can be added  huge volatility. From a  $20,000 high in December it  is now at less than $8,000.  It might be argued that for example  gold is also volatile but the difference is that gold  always has an intrinsic value . There is no chance that gold would ever become worthless or seriously cheap  and consequently even if it has its ups and downs holding it can never be an unequivocal disaster.   Cryptocurrencies could all too  easily   become worthless very quickly.

The volatility is primarily  driven by “bubble mania” whereby people pile in to a market caught up by the frenzy of the moment ,  but another component is  surely the  number of cryptocurrencies which are appearing. Investors climb into  the cryptocurrency which looks  the best prospect for growth at  any moment.

Cryptocurrencies are also vulnerable to fraud and theft  throughhacking.  The  most recent admitted example affected the  Japanese exchange CoinCheck.

More banal  disadvantages  are the high transaction fees, long wait times and lengthy identity checks. There have also be practices which have shut out would be buyers and sellers  especially  at times when  serious  volatility occurs.

No one to make restitution if things go wrong

Potentially the greatest problem with cryptocurrencies is there is no person or institution which can be held responsible if things go wrong . They have largely operated without state interference although that is beginning to change. The head of the Bank for International Settlements, Agustín Carstens  recently warned  “If authorities do not act pre-emptively, cryptocurrencies could become more interconnected with the main financial system and become a threat to financial stability…” He also described Bitcoin as “little more than a   ponzi scheme”,

This type of concern  has led governments to begin  taking the first faltering steps to regulate  crypto currencies and banks have begun to stop the purchase of cryptocurrencies using credit cards  to purchase them.

States are also moving to investigate the possibilities for running their own cryptocurrencies . These  apart from the possibility  of inadvertently undermining a country’s economy in the same way that non-state cryptocurrencies might undermine it, also raises the possibility of  governments indulging in widespread surveillance of any cryptocurrency transaction made.

Governments could also act to damage competitor countries .  For example China is reputedly ideally placed to undermine Bitcoin because much of the computing power required to sustain  BitCoin is within China.

More broadly there are some important questions which remain to be answered. These are :

1. What will be the relationship between real life currencies and cryptocurrencies? The danger is that if cryptocurrencies become a competitor to real life currencies they could undermine them.
2. How can cryptocurrencies be put under state control other than by banning them? The answer is surely that it cannot be done  for two reasons. First,  even if the size of the  issued  currency is restricted, for example, the maximum number of Bitcoins,   there could be no restriction   on what the value of  a Bitcoin could reach.  Second, cryptocurrencies  are  designed  to be  universal. Whatever a government might want to do a successful cryptocurrency will still be available  because the blocking of websites relating to them is never going to be perfect.  For this reason a cryptocurrency owned by a state would also be problematic.
3. How would cryptocurrencies affect international finance or trade?  There is obviously potential  for huge amounts of  money to be redirected. For example,  If  the  Pound  is used to buy cryptocurrencies  where do the Pounds go? Potentially anywhere in the world.  Because  it will probably be hoarded  that will  decrease the velocity of circulation of the money. That would hinder economies.
4. Could a country be left with a severe deficit in real life currencies  and a large hoard of cryptocurrencies and be unable  to settle public debts or pay for public services because they cannot pay for those things with  cryptocurrencies?  A large advanced economy would probably not be at risk of that but many small  first world economies and  developing economies, even  China and India, might well get into a real mess.
5. How will cryptocurrencies fit in with fractional reserve banking? This is the normal practice of banks (at least in the West) reserves equal to only a fraction of its deposit liabilities. The idea is based on the assumption that the reserves will be sufficient to meet any likely demands from depositors wishing to withdraw money  because only a fraction of deposits will ever be requested  over a short period of time.  If the demand for cryptocurrencies continues in its seemingly insatiable way the reserves which are now deemed sufficient could easily prove to be grossly inadequate.
6. Will cryptocurrencies become as simple to use as a swipe card, credit card or even cash? Well, Bitcoin has been going for ten years and is still complicated to use  and effectively impossible to “mine” for the vast majority of  people. Nor is it of much use when it comes to making everyday purchases.  The number of opportunities to purchase with cryptocurrencies will doubtless  increase but their use in unlikely to be as easy as using a card or cash for quite some time. Moreover, unless the volatility problem is overcome living using just cryptocurrencies would be akin to living in a country with a very heavy dose of inflation. A person paid in a volatile cryptocurrency  might receive the equivalent of £100 on a Friday and find it worth £60  by the following week.
7. If states allow cryptocurrencies to trade in their territory, the question arises will governments eventually have to protect deposits of cryptocurrencies as they do deposits of real life currencies  like the  Pound?  If they  do  exactly what would they be insuring? After all a  private cryptocurrency might simply drop to zero value.  Of course real life currencies can suffer serious devaluations but at least in the case of countries  such as the UK and the USA governments and central banks have some control over the currency. With a private, that is, non-state cryptocurrency , governments and central banks would probably have no meaningful control. In such circumstances insuring bank deposits of cryptocurrencies might be impossible because of the  potential cost.

The head of the Bank for International Settlements, Agustín Carstens  was not far wrong when he likened Bitcoin to a Ponzi scheme. It is not  a Ponzi  scheme as such,  but the fact that Bitcoin is still largely unregulated and there is no nation state or supranational agency behind it means that it and the increasing number of cryptocurrency competitors means that it is essentially resting on the same utterly  insubstantial foundations that eventually always catch up with the Ponzi scheme, the need to keep generating confidence to lure in more and more suckers.

Just on the facts cryptocurrencies bear an uncanny  likeness to snake oil. Governments need to get a grip.

Racial preference in babies

Robert Henderson

Two studies by researchers in Canada , US, UK, France and China examining the response of babies of six to nine months old to people of different races  have shown  the babies to have a preference for people of their own racial type

The first study  (published in Developmental Science) tested the response of babies to associating music with own-race faces   and other-race faces with the result that from six months happy music began to be associated with own-race faces and sad music with other-race faces.

The second study  (published in Child Development) found that   “Infants rely more on gaze cues from own-race than other-race adults for learning under uncertainty”  and  six to eight months old babies  were “were more inclined to learn information from an adult of his or her own race than from an adult of a different race.”

The studies involved “babies who had little to no prior experience with other-race individuals. “

Dr. Kang Lee, professor at OISE’s Jackman Institute of Child Study  and the  lead author of the studies states  “The results show that race-based bias already exists around the second half of a child’s first year.  This challenges the popular view that race-based bias first emerges only during the preschool years.” ……

‘“When we consider why someone has a racial bias, we often think of negative experience he or she may have had with other-race individuals.  But, these findings suggest that a race-based bias emerges without experience with other-race individuals,” said Dr. Naiqi (Gabriel) Xiao, first author of the two papers and postdoctoral fellow at Princeton University.’.

Racial bias is natural

That racial bias is either directly inbuilt or at the least developed very early  in humans as a response to  the racial type which surrounds them should surprise no one because it is a  natural result of homo sapiens being social animals. Behaviours and physical differences which signal that an individual belongs to a particular  social group are a  sine qua non of being a social animal for without such signals trust cannot develop and without trust there can be no social animal.  That humans should be biologically  programmed to respond more favourably to those of the same racial type is an example of the necessary signals required  to determine the boundaries  of their  human group.

Those who will not have natural selection determining human responses to racial difference at any price will doubtless claim that if there is racial bias at such an early age it is environmentally determined, that it is nurture not nature. For example, it might be thought that a  baby’s  preference is for  those who have provided care for the child during the early months after birth. Plausible enough at first glance . However,   the research demonstrated  that   babies showed a general preference for those of racial type like their own  not simply a preference for individuals with whom they are familiar. Of course this could be the consequence of being accustomed to same race faces – remember that the babies  were specifically chosen to have had little or  no experience of different race faces and  the babies  could have  been imprinted with a positive response  to same-race faces and to see other-race faces as either unrecognisable as faces or simply  as not being faces containing the trigger qualities to inspire trust.

But even if nurture did determine the infants’  preference for those of the same race by making  babies  identify with the race of those who  cared from them  for the first six months   or so of their lives the nurturists would still be faced with the problem  that there must be an innate behaviour in babies which  makes them favour those  of the  racial type who brought them up in the first six months or so  of their out of womb  existence.   Even if every baby was removed from their parents and given to those of a different racial type to raise – an obvious and deeply sinister absurdity –  the  babies would, if it is nurture at play,  still end up favouring the racial type who raised them in the early months.  Racial bias would not be eradicated merely shifted from the baby’s race to another race with,  presumably, the  baby then favouring  those of a different race to themselves.

Beyond infancy

The significance of the research reaches far beyond the behaviour of  babies. If the babies naturally develop a preference for those of  the same race as themselves, whether though an innate preference or because of the race of those who raises them,  who  will be in the vast majority of cases the same race as the baby,  then it is reasonable to expect that preference is carried through to adulthood and through adulthood.

Nothing  better demonstrates the  natural tendency  of human beings to  remain racially distinct than the remarkably low rate of inter-racial breeding even  in circumstances  where there is every opportunity for  it,  most particularly in the great cities of Western Europe and  North  America, where the populations are increasingly varied and the prevailing  elite ideology positively encouraging of such liaisons.

Even   societies which have had very racially mixed populations for a long time  display a  remarkable  ability to maintain retain racial distinctions over  very long  periods  of time – Brazil is an excellent  example of  this,  with social class being very much graded by skin colour. To argue that racial difference is  not important to the choice of a mate is as absurd as arguing  that the attractiveness of a person is irrelevant to the choice of a  mate.

In  Freakonomics Steven Levitt and Stephen Dubner  cite a study made of a  US dating site (the full story is on pp 80-84).  The site is one  of the  largest  in  the US and the data examined  covered  30,000  people equally  divided  between San Diego and Boston.   Most were  white  but there was a substantial minority of non-white subjects.

The  questionnaire the  would-be  daters had to  fill  in  included  a question  choice on race as “same as mine”  and “doesn’t matter”.   The study  compared  the responses  by white would-be  daters  (those  from non-white were not analysed) to these  questions with the race of  the emails  actually  sent soliciting a date.   The result  in  Levitt  and Dubner’s words was:

“Roughly  half of the white women on the site  and  80  percent  of  the white men declared that  race  didn’t  matter to them. But the response data tell a different story  The white men who said that race didn’t  matter sent  90  percent of  their e-mail  queries  to  white women. The  white women who said race  didn’t  matter sent about 97 percent of their e-mail queries to white men.

“Is  it  possible that race really didn’t  matter  for  these  white women and men and that they simply  never  happened  to browse a non-white date  that  interested them?”

Or,  more likely, did they say that race didn’t matter  because they wanted to come across  especially  to potential mates of their own race as open-minded?”

In short, around 99% of all the women and 94%  of all men in the sample were  not  willing  to  seek a  date of a  different  race.   How  much stronger  will  be  the tendency to refuse to breed with a  mate  of  a different race?

Another  way  of testing the desire to remain racially separate  is  to look at social class and inter-racial  breeding. The higher up the social scale a  person is the less likely they are to have a partner of a  different race – if you doubt this try to find examples of the rich and  powerful who  have  a  partner of a different race. Those who  have the most choice overwhelmingly choose members of their own racial type, despite the fact that they have the protection of their wealth and position  to shield their spouses and children  from the effects of racial discrimination.

If sexual desire will not commonly override the natural disinclination to remain racially separate nothing will.

The fact of identifiable races

The  fact  that  humans  have external  racial  differences  which  are sufficiently distinct to allow  people throughout the world to  broadly categorise an individual into categories such as  white and  black is in  itself  indicative of the innate human tendency to  breed with those who are racially similar, even though for several thousands of years large human populations of different racial types have existed in close proximity. If  human beings did not have an innate preference for those who racially resemble themselves, humanity  would have bred itself  into something approaching a uniform racial type, at least in those parts of the  world  which  were not very isolated – different  races  have  had regular  and  numerous  contact  with each other  for  at  least  three thousand years. The alternative explanation to an innate tendency is the truly fantastic one that Man everywhere spontaneously developed cultural barriers to breeding which had nothing to do with any innate tendency. If anything is a social construct it is not race but the liberal idea that Man is a single species.

Race is  much stronger as a mediator of who to mate with than ethnic (cultural) difference – think of the very  high proportion of those in Britain who have Irish/Welsh/Scottish/English mixed ancestry. Nonetheless, ethnic differences are culturally potent amongst racially similar populations. For example, on either side of the England/Scotland border,  the inhabitants  born and raised close to the border retain Scots and English accents even though they may have lived their entire lives only a few miles apart.

Because the tendency to mate with those of a similar race is so strong  and universal,  both in place and time, it is reasonable to conclude  that the  behaviour  is innate and that cultures  necessarily include  the requirement for a member of the society to be of a certain racial type. The  consequence of this is that someone of a different racial type  is effectively precluded from full integration because one of the criteria for  belonging has not been met.  That is not to say,  of course,  that many  of the habits of mind of an alien culture may not be  adopted  by someone  of  a  different race.  What is withheld  is  the  instinctive acceptance  of the alien and his or her descendants  as members of  the society. Just as no human being can decide for themselves that they are a member of this or that group, no individual can decide that they belong to this or that nation because it is a two-way process: the other members of the group they wish to join have to accept them as a true member of the group. (Stephen Frears the English  film director once wryly remarked that he had known the actor Daniel Day-Lewis “before he was Irish”).

Assortative mating

There is a widespread  biological behaviour  known as assortative mating.   Members  of  sexually reproducing  animals  select  mates  by certain criteria.  In that much loved laboratory animal,  the fruit  fly drosophila,  this may be the number  of sternopleural bristles;  in Man it  includes  many criteria including racial type.  Other  human  prime assortative criteria are size, intelligence, education and class.  Some of  these criteria such as education and class are more clearly  linked to  nurture  than  Nature,  but even they can be  direct  or  indirect expressions  of   qualities which are at least largely innate  such  as intelligence. I  say  direct  or  indirect  because  the  beneficial qualities  may not be in the individual, for those with  superior education and high social class may lack the  innate qualities of their parents  or earlier ancestors and their privileged position may  simply be a residue of the superior innate abilities of their parents or other ancestors.

For the purposes of inter-racial mating, size,  intelligence, education and  class all come into play. There are clear average  differences  of size  between the three major races:  blacks largest,  whites  in  the middle and Asians smallest.  This would mean that on average members of one  racial  group  would be less likely to choose  another  member  of another racial group. The differences in IQ would have the same effect, with  blacks  being  less likely to mate with the  other  two  races because their IQ is further removed from them than  they are from  each other. Differences in IQ will also be reflected, directly or indirectly in  educational achievement and social class and hence in  mating, for example,  if a minority population of blacks amidst a  majority  white population  have proportionately  more people of low education and  low social  class than the white majority,  something which  should  happen other  things  being equal because of their inferior  IQ  distribution, they are less likely to mate with members of the white majority simply on the grounds of education and class.

The hopeless and dangerous quest for behavioural change

The lead author of the two studies Dr. Kang Lee has no doubts about the  scope and power of racial preference,  but  like so many  academics who  work  in the field of racial difference  he wants to try to fit his findings into a politically correct shape, viz:

“Implicit racial biases tend to be subconscious, pernicious, and insidious. It permeates almost all of our social interactions, from health care to commerce, employment, politics, and dating. Because of that, it’s very important to study where these kinds of biases come from and use that information to try and prevent racial biases from developing,” he said…..

“These findings thus point to the possibility that aspects of racial bias later in life may arise from our lack of exposure to other-race individuals in infancy,” …

“If we can pinpoint the starting point of racial bias, which we may have done here, we can start to find ways to prevent racial biases from happening,” he said.

“An important finding is that infants will learn from people they are most exposed to,” added lead writer  Dr. Xiao, indicating that parents can help prevent racial bias by, for example, introducing their children to people from a variety of races.

The idea that babies could  be programmed to not differentiate between different racial types is practically impossible .  The impracticalities range from most people not having ready   access to people of other races or the social contact which might allow babies to experience people of other races to the fact that there are in practice many different racial types  beyond the basic racial classifications of white, black and so on, for example, an Ethiopian  looks radically different from a Nigerian and a Mongolian very different from a Han Chinese.   In short, the idea that showing babies people of different  races would not condition them to react to all racial  types in the same manner.  Moreover, is it realistic to imagine that people would generally  be willing to seek out those of a different race to accustom their children to  different races? I think that most people would think that extremely improbable.  What then, state coercion to force such  associations?

The experiments also leave some important questions untested.   What happens with  mixed race babies  where the parents are not mixed race?  For example, how  would a child born of a white father and black mother respond to such an experiment?  Or how about a child born of a black father and a Chinese mother?

The belief that behaviour which is innate can be eradicated  is downright dangerous because an innate behaviour evolves for a good reason. The reason for the preference in this case is to  maintain  the integrity of the group to which the individual belongs.   If it was possible to change the bias towards those of the same race the logical result would be to weaken the group to which  an individual  belonged.

It is also extraordinarily  difficult to see how such a change might be effected  because if the behaviour is innate by definition it would be what the individual  naturally wants to do.  If pressed on the subject the politically correct would say it was a matter of education,  by which they mean indoctrination or brainwashing. This of course is what many Western elites have been practising for the past fifty years or more as they have  gradually placed  political correctness at the centre of  Western  politics. But despite the immense attempt at politically correct indoctrination (which begins in schools at a very young age) mixed with threats of penalties such as the loss of jobs, the exclusion from most public offices and  criminal charges  for saying politically incorrect things , preference for those of the same race has remained stubbornly unmoveable amongst most of those upon whom the indoctrination  has been  practised.

But the politically correct  indoctrination and threats  are not  even handedly  applied.  In the West it is the white native populations which bear the brunt of these practices.  Indeed, racial  and ethnic minorities are effectively left unmolested by the politically correct.  The result is to  allow these minorities to  have free rein to still exercise the innate preference for those of the  same race and by extension the  same ethnicity, while the white native populations are constantly denigrated and increasingly punished by the state and the mass media if they  attempt to do the same, namely, to  favour their own racial type and their own cultural practices.  The result is to strengthen the racial and ethnic minorities in the West and to weaken the native populations.

Of course most people amongst the native white populations of the West will supply the politically correct words when they are in  public but it is remarkable that so many native white people , including those with a public profile, do breach the politically correct  diktats, something which is doubly remarkable because of all the politically incorrect sins it is those which deal with race and ethnicity which attract the heaviest penalties. The fact that people so often behave in such a politically incorrect fashion when it comes to race and ethnicity tells its own story, namely, they still have the innate preference for their own race and ethnicity and the attempt to make them deny this, or at least pretend to deny it,   produces a kind of emotional claustrophobia which results in a politically incorrect transgression.

Perhaps in the future it may be possible to genetically change the way human being relate to those of a different race but there is no sign of any  possibility of that at present. But suppose it was possible, how could such a profound alteration in the human psyche be embraced by any society which called itself free or democratic?

2016 and the future

Robert Henderson

What has changed over the past year?

The grip of the Western globalists is slipping.   They do not   realise it yet but their day is  almost done. Their ramshackle ideology,   a toxic blend of open borders politically correct internationalism  and what is crony capitalism but called by  those with a vested interest in it neo-liberal or laissez faire  economics , has wrought as it was certain to do,  rage and increasingly despair amongst  the majority of electors in Western states who are increasingly turning to  politicians that at least have some grasp of what is necessary to preserve  the viability of Western nation states.

The most  optimistic possibility for the West  is that  parties which do have some real attachment to what the great mass of people seek will be both elected and when in office carry through their pre-election promises.  But this is far from certain. It does not follow that what will replace globalism will be a politics which reflects the wants and needs of Western voters because the existing elites may drop all pretence of being anything other than an authoritarian clique and go in for wholehearted suppression of any dissent.  There are already signs that  this might happen with  the  growing willingness  amongst Western  elites  to  censor  political ideas, potent examples of which have been the  recent conviction of Gert Wilders in Holland for inciting racial hatred by saying there should be fewer Moroccans in  Holland , while in the UK  the  Prime Minister Theresa May has just sanctioned the putting into law of a definition of anti-Semitism so broad that any criticism Jews or Israel could be interpreted as anti-Semitic. Much will depend on how Donald Trump’s presidency develops.

In Britain the  EU referendum  has dominated everything both before and after the vote to leave in the political year .The anti-democratic mind-set of those who wanted to remain in the EU has been nakedly shown by colossal attempts to  sabotage the result of the referendum through legal  and political action and an incessant bleat about how they want a soft Brexit not a hard Brexit when only  Brexit  exists.

Something which the government calls Brexit will  eventually emerge,  but it could easily  be  a beast which is  directly at odds with what the British people voted on when they went to the polls on 23^rd June, namely, for a clean break with the EU.  If this government, or conceivably its successor, concludes  a deal which stitches the UK back into the EU with  such things as free movement of EU citizens into the UK, the UK paying for the “privilege” of remaining in the Single Market and the UK being subject to the European Court of Justice, there  is surely a serious risk of political violence. But even if that  is  avoided British politics would be seriously curdled by such a betrayal.

The other  pressing political  need  is  for an  English parliament and government  to balance the devolution of powers to Scotland, Wales and Northern Ireland. A procedure to have only  MPs sitting for  English seats  voting on English only legislation  (English votes for English laws  or EVEL for short)  began a trial in 2015,  but  it  has few teeth because  it is difficult to disentangle what is English only  legislation, not least  because  MPs  for seats outside of England argue  that any Bill dealing solely with English matters has financial implications for the rest of the UK and , consequently, is not an England only Bill. Nor does EVEL allow English MPs to initiate English only legislation. Most importantly  England , unlike Scotland,  Wales and Northern Ireland, is left without any national political representatives   to concentrate on purely English domestic matters.

The House of Lords review of its first year  in operation makes EVEL’s  limitations clear:

The EVEL procedures introduced by the Government address, to some extent, the West Lothian Question. They provide a double-veto, meaning that legislationor provisions in bills affecting only England (or in some cases, England and Wales, or England and Wales and Northern Ireland), can only be passed by the House of Commons with the support of both a majority of MPs overall, and of MPs from the nations directly affected by the legislation.

Yet English MPs’ ability to enact and amend legislation does not mirror their capacity, under EVEL, to resist legislative changes. The capacity of English MPs to pursue a distinct legislative agenda for England in respect of matters that are devolved elsewhere does not equate to the broader capacity of devolved legislatures to pursue a distinct agenda on matters that are devolved to them

The most dangerous general global threats are plausibly these in this order

1. Mass immigration, the permitting of which by elites is the most fundamental treason because unlike an invasion by force, there is no identifiable concrete foreign enemy for the native population to resist. Yet the land is effectively colonised just the same.

2 Uncontrolled technology, which leaves the developed world in particular  but increasingly the  world generally,  very vulnerable  to suddenly being left without vital services if computer systems fail naturally or through cyber attacks.  Judged by the number of reports in the mainstream media the frequency of personal data being hacked and major computer systems  going down, most notably banks, is increasing. This is unsurprising because both state organisations and private business are remorselessly  forcing  customers and  clients to use web-based contact points rather than deal with a human being.  This in itself makes life unpleasant and for older people in particular most difficult.

In the  medium  term –  probably within ten years –  there is the existential  threat  to humans of general purpose robots being able to cause a catastrophic  drop in demand by taking over  so many jobs that demand collapses because huge numbers are rapidly made unemployed.  To that can be added the development of military robots which have the capacity to make autonomous judgements about killing humans.

The  general lack of political concern and a seemingly  universal inability of those with power and influence to see  how robotics and AI systems generally  are rapidly  developing is astonishing. Time and again when the subject of robots and AI systems is raised with such people they will bleat that new jobs will arise due to the new technology, as new technology has always created jobs, and these developments will provide the jobs for humans.

This is sheer “it’ll never replace the horse” ism .  Intelligent robots and AI systems will not only take existing jobs,  they will take most or even all of the new jobs that arise.  This is the potential catastrophe that humans face from robots and AI,  the rapid loss of such  huge amounts of employment  that the economic systems of both the developed and the developing world cannot function  because of the loss of demand,  not the SF style scare stories about intelligent robots making war on humans.  The other thing that  politicians do not seem to understand is that when there are  robots and AI systems sophisticated enough to do most of the jobs humans do, the loss of human jobs will occur at great speed. We can be certain of this for two reasons; our experience with digital technology  is of rapid advances and robots and AI systems will be able to design and build even more advanced  robots and AI systems, probably  very quickly.

Aside from digital technology,  advances in genetic engineering and ever more radical transplant surgery raise the question of what it is to be a human being if full face transplants are now available and the possibility of things such as a head being transplanted in the not too distant future.   We need to ask ourselves what it is to be human.

3. Islam – serious unrest is found throughout the world wherever there are large numbers of Muslims.
4. Ever increasing general instability. Contrary to Steven Pinker’s view that the world is becoming more peaceful, if civil conflict is included things are getting worse.  Formal war may be less easy to identify , but ethnic  (and often religious ) based strife plus repression by  rulers  is so widespread outside the West that it is best described as endemic. Globalisation =  destabilisation because by making the world’s economic system more complex , there is simply more to go wrong both economically and socially. Sweeping aside  traditional relationships and practices is a recipe for social discord.  All of economic history tells you one thing above all else: a strong domestic economy is essential for the stability of any country.   The ideology of laissez faire, is like all ideologies,  at odds with  human nature and reality generally and its application inevitably creates huge numbers of losers when applied to places such as China and India.

The most dangerous specific  threats to global peace and stability are:

–              The heightened tension between China and the rest of the Far East (especially Japan) as a consequence of China’s growing territorial ambitions.

–              China’s extraordinary expanding  shadow world empire which consists of both huge investment in the first world and de facto colonial control in the developing world.

–              The growing power of India which threatens Pakistan. An India/Pakistan nuclear exchange is  probably the most likely use of nuclear weapons I the next ten years.

–              The increasing authoritarianism of the EU due to both the natural impetus towards central control and the gross mistake of the Euro.   This will end either in a successful centralisation of  EU power after the UK has left the EU  or the attempt at centralisation will lead to a collapse of the EU.

The Eurofanatics  continue to play  with fire in their attempts to lure border states of Russia into the EU whilst applying seriously damaging sanctions to Russia. It is not in the West’s interest to have a Russia which feels threatened or denied its natural sphere of influence.

–   The ever more successful (at least in the short run) attempt of post-Soviet Russia to re-establish their suzerainty over the old Soviet Empire and Putin’s increasingly martial noises including substantial re-armament.  However, these ambitions will be likely to be mitigated by the plight of the Russian provinces of the Far East where there is unofficial Chinese infiltration of the sparsely populated and natural resource rich land there. Eventually China will wish to capture those territories.

Robert Henderson 17  12 2016

Film review – Steve Jobs

Main Cast

Michael Fassbender as Steve Jobs, co-founder of Apple Inc

Kate Winslet as Joanna Hoffman, marketing executive for Apple and NeXT and Jobs’ confidant in the film.

Seth Rogen as Steve Wozniak, co-founder of Apple and creator of the Apple II

Jeff Daniels as John Sculley, CEO of Apple from 1983 to 1993.

Katherine Waterston as Chrisann Brennan, Jobs’ former girlfriend and Lisa’s mother.

Michael Stuhlbarg as Andy Hertzfeld, a member of the original Mac team.

Makenzie Moss, Ripley Sobo, and Perla Haney-Jardine as Lisa Brennan-Jobs (at different ages), the daughter of Steve Jobs and Chrisann Brennan]

Director: Danny Boyle

Screenplay: Aaron Sorkin

Robert Henderson

The film is not about the entirety of Jobs’  life or even all of his adult life as a computer entrepreneur. It runs from the launch of the Apple Macintosh in 1984 to that of the  iMac in 1998. Consequently, it  misses arguably the most fruitful part of Jobs’  business  life which ended with his death  in 2011.

Running through the  film are two themes from outside of  the IT world. The first  is the impact of the knowledge that he (Jobs) was adopted at birth, rejected by his first would-be adopters after a few months and the adopted again.  Jobs’ inept handling of  human relations is attributed to this.   The second theme is a remnant of Jobs’ rather chaotic social life which in the film he runs on the same dysfunctional basis as his work. The remnant is his  one time girlfriend Chrisann Brennan (Katherine Waterston)  and their daughter Lisa whom Jobs tries not to acknowledge initially  as his child, but whom he  gradually accepts as his daughter.

Those are the circumstantial bare bones of the film.  The film’s distinction and energy comes from a remarkable turn by Michael Fassbender as Jobs. Fassbender  has a talent for portraying obsessive characters. He did it in magnificently in  Shame as a sex obsessive and he does it here with his portrayal of Jobs  as an unrestrained control freak with a adolescent grade  ego the size of Jupiter.  He is constantly bullying and appears to have  little if any moral  sense. When he does behave more reasonably it is invariably not because he feels guilty,  but either as a result of  Joanna Hoffman (Kate Winslet)  thrusting what he is doing wrong so firmly in his face that he cannot ignore it or because someone treads on his  personal territory , as when  he discovers that Andy Hertzfeld  (Michael Stuhlbarg)  has paid his daughter’s first semester fees after Jobs in a fit of temper told  her he will not pay them.  In short, Fassbender’s Jobs is very like a particularly fractious  teenager without any  adult brake on his bumptious behaviour.

Whether  Fassbender’s Jobs is a realistic portrayal  of the man is another matter. It is disputed by many who knew him  and certainly this filmic Jobs is a monstrously unsympathetic character, the sort of person who continually brings gratuitous stress into the lives of those around him.     Nor is he shown to be an  infallible  entrepreneurial wizard.  Jobs got many things  right with Apple, especially after his return to the company, but he also got a great deal wrong by relying on his judgement of what would appeal  to the public and taking little account of what his programmers and hardware engineers told him .

His worst mistake was  the original Apple Mac which he deliberately had made so that it could only take programs written for its operating system (which was incompatible with that of Microsoft),  could not readily  accommodate add-ons to improve functionality and, just to put the cherry on things, the AppleMac case could not be opened to repair or enhance except with special tools  which were not available to Apple Mc purchasers .   At the time it was launched I remember thinking it was a bonkers way of proceeding.  It was an act of supreme egotism on Job’s part because he wanted the system to be entirely self-contained, that is to be a system  he envisaged  and controlled.  With Jobs in this characterisation it was always his way or the highway.

The Wozniak character expresses his frustration at Jobs’ lack of technical knowhow most vividly when he says “What do you do? You don’t write code. You’re not an engineer.   You’re not a designer. You can’t put a hammer to a nail.  I built the circuit board. The graphical interface was stolen from Xerox Park, Jeff Raskin  was the leader of the Mac team before you threw him of his own project. Someone else designed the box.  So how come  ten times in a day I read  that Steve Jobs is a genius?  What do you do?”

Jobs’ reply is a facile “I play the orchestra, and you’re a good musician. You sit right there and you’re the best in your row.” Fine if the tune Jobs is conducting is a hit with the public but quite often it was not.

This scene is one of the best in the film. The problem is that the real Wozniak denies ever confronting Jobs so directly: “Anybody who knows me will tell you I just don’t say negative things to people, and could not have said them, and didn’t.”

There is a very strong acting performance across the board. Steve Jobs is splendidly   cast and apart from Fassbender,  there is a dominant  turn  by Kate Winslet (does she ever give a poor performance?) as Jobs’  right hand woman and confidant  while  Seth Rogen as Steve Wozniak, Jeff Daniels as John Sculley,  Michael Stuhlbarg as Andy Hertzfeld, a member of the original Mac team are all very convincing because they are just the type of personalities with just the type of looks one would expect in such jobs.  Katherine Waterston as Chrisann Brennan is, Jobs’ former girlfriend and Lisa’s mother is by turns convincing  as a single mother justifiably  angry at Jobs’ failure to acknowledge his daughter denied  and pathetic inadequate  .

The screenplay is by Aaron Sorkin who wrote the screenplay for the  Social Network.  This is not anything like as good a film as the Social Network, which retained its taut energy and constantly  evolving storyline  throughout , whereas Steve Jobs  is much more dependent on Fassbender’s  bravura scenes which in general tone do begin to have a certain sameness towards the latter stages of the film. Nonetheless Steve Jobs has much of the Social Networks quick wittedness in its dialogue and the relationship between  Fassbender and Winslet is constantly sparky.

This film is not as good as it might have been but it will not bore you.

 

The digital tyranny – The threat posed by a cashless society

Robert Henderson

We are in danger of sleepwalking into a cashless society. More and more purchases are made by electronic means , through standing orders,  direct debits, debit cards  or credit  cards.   Debit and credit  card purchases already account for over a third of UK GDP and more than three quarters of retail purchases (up from 46% in 2003), while  card and computer purchases have just overtaken UK cash sales.

The next logical step  towards  a cashless society is to have laws which allow private businesses  and any public body  which charges for  its services  to refuse cash payment.  Denmark is seemingly  taking the first tentative steps along that road.  The Danish Government has proposed legislation which if passed  will  remove the obligation to take cash from retail outlets such as petrol stations,  clothes shops  and restaurants next year.

With the combination of more and more people using  methods of payment other than cash and the willingness of technologists to  feed the trend with ever more sophisticated and comprehensive  systems of  cashless payments, there is no reason to think that this trend towards  making cash dysfunctional will stop unless governments take a hand and prevent cash from becoming  defunct by law.  This development  is alarming because the abolition of physical money would  carry  tremendous dangers in terms of  the opportunities for  state authoritarianism  and simple practicality.

The dangers  from state authoritarianism are:

1. There would be no money which could be held which was not potentially known to the state, because with only electronic money available it would have to be stored electronically and be accessible via the Internet  if it was to be useable.

But what about using virtual currencies such as Bitcoin?  Apart from the dangers of such a means of exchange – the great volatility in value, the frauds which are occurring where Bitcoin is stolen, the lack of a lender of last resort and a restricted range of  goods and services which can be bought – Bitcoin still  needs  to be stored electronically and hence is  potentially identifiable and accessible to governments. There would also be an audit trail from an individual’s source of electronic money  to the purchase point of a virtual currency  like Bitcoin. The only exception would be if someone sold something or did paid work for someone and was paid in a virtual currency like  Bitcoin.

If Britain  went cashless and others did not the likelihood is that a black market in foreign cash such as dollars would  arise in Britain.  There would also be the possibility of exchanges made by barter or a product such as cigarettes becoming a de fact currency.

2. A cashless system would allow the state to have all  electronic money stored in a central government controlled place.  This would leave  the  individual  at the mercy of the state which could deny electronic money to anyone within their jurisdiction by cancelling or blocking their means of payment.
3. The state could more readily control the money supply if all bank accounts were  under the control of the state and physical cash did not exist.  The state would be able to manipulate public economic behaviour by  imposing a negative interest rate when increased spending is deemed desirable  – people save less because it costs them money – and a transaction tax every time a purchase is made  – people spend less if because it will cost them to make a purchase – if it is thought an economy is over heating.
4. The state could remove money from your account at will.
5. The opportunities for general surveillance of the individual both by the state and by private corporations or individuals would be greatly increased.

The problems of practicality are:

1.The idea  assumes that everyone can  afford a  computer of some sort, whether that be a mobile phone, tablet or desktop, and can afford to replace their means of getting access to the Internet  every few years at best.  The reality is that millions of people are too  poor to be able to meet such costs.  The taxpayer would have pay for access to electronic money for those too poor to buy their own.

2. Many people cannot use the digital technology.  Huge numbers of people  are still not using  this technology. The latest figures from the Office for National Statistics (ONS) estimates that  11% of the UK population (approximately 6 million) has never  used the Internet.  Moreover, the ONS did not ask for frequency of use merely whether someone had used the Internet When the ONS asked whether people had used the Internet in the three months prior to the question being asked,   only 86% answered yes.  Thus 14% of the population had either not used the Internet for more than three months  or   had never used it and, importantly,  only 68% of disabled people had used the Internet in the previous 3 months. Clearly there will be large numbers of people, including  the most vulnerable in society,  who will seriously struggle to use digital technology for the foreseeable future. If cash becomes illegal many of  these people will literally not be able to live if they cannot understand the technology or have no one to operate it for them.

3.The computer systems which support a cashless society will inevitably be subject to  regular disruption, whether from hacking or simple failure because,  as we all know,  digital technology frequently goes wrong and the system downtime can be considerable.   Imagine being unable to access the only means you have of paying for something.  It would probably be necessary to have more than one electronic payment device because of this, although that would not help if the fault was not with your payment device but with that of those from whom you wished to make a purchase.

4. Many people will have their means of accessing electronic money stolen  or lose it themselves.  They would then need to replace their equipment which allowed them to access their electronic money.  Many would not be able to afford to do so and those most likely to lose or have their electronic money access  equipment stolen  would be the old and the disabled.

A cashless society would have considerable attractions for a government. It would greatly extend the power of the state over the individual. Crime generally might  be reduced without  physical cash to oil the felonious wheels, although cybercrime would become more tempting in the absence of banks to rob and people to mug. Tax evasion would become very difficult for most people (the rich would simply move their money to other jurisdictions) .  There would also be the saving on the abolition of the need to maintain a physical money supply.  Banks  and other financial institutions would also welcome the abolition of cash as it would remove the considerable cost of physically handling cash and maintaining a branch network.

The danger is that cash will become defunct by default,  because the Government shows no interest in protecting cash and arguably is surreptitiously encouraging  its demise by making it either impossible or very difficult to access public services in any way other than through the Internet.  We could reach a point where, say, 90% of the population use electronic money  and a government simply says it is time to go cashless ignoring the fact that millions of people who cannot use electronic money will be left in the soup. Politicians need to be lobbied now to ensure that  the maintenance of cash remains a legal requirement.

But it is not just a case of ensuring that cash remains a legal requirement. Even a  widespread refusal to accept cash  by businesses and other corporate bodies which charge for their services  would be seriously socially disruptive. That idea also needs to be knocked on the head  by making it illegal to refuse cash in payment for anything.

Get writing to your MP.

Wall Street, the Wolf of Wall Street and the decline of moral sense

Robert Henderson

 

Wall Street (1987)

Main cast

Michael Douglas  as Gordon Gecko

Charlie Sheen as Bud Cox

Daryl Hannah  as Darien Taylor

Martin Sheen as Carl Fox

Terence Stamp as Sir Larry Wildman

Hal Holbrook as Lou Mannheim

Sean Young as Kate Gekko

James Spader as Roger Barnes

Director Oliver Stone

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The Wolf of Wall Street (2013)

Main cast

Leonardo DiCaprio as Jordan Belfort

Jonah Hill as Donnie Azoff

Margot Robbie as Naomi Lapaglia

Matthew McCaughey as Mark Hanna

Kyle Chandler as Patrick Denham

Rob Reiner as Max Belfort

Director  Martin Scorsese,

Twenty six years lie between Wall Street and The Wolf of Wall Street (TWOWS) hitting cinema screens. Wall Street is fiction, although there are reputedly people in real life from whom the film’s main characters were developed, for example  Sir Larry Wildman is supposedly drawn from  on the British financier Sir James Goldsmith. The Wolf of Wall Street (TWOWS) is based upon the autobiography of a Wall Street trader Jordan Belfort. How much of that is fact  is debatable, although the general tone of the man’s life given in the book  is plausible.

Both films  begin their action in 1980s. Both deal with the shady world of finance. Both are vehicles for the unbridled egotism of their main characters.    There the similarity between them ends.  Wall Street is about  corporate raiders, men who seek to take over companies and then  asset strip them,  sell them on  quickly for a profit or run them as a business for a while, reduce costs (especially by cutting jobs ) and  then sell them . The main criminality involved in the film is insider dealing.

TWOWS  is simply about making a fast buck and the faster the better, with not even a show of doing anything beyond making money.   These people use   any method from the huckster selling of penny shares to insider dealing and celebrate each success in the spirit of the man successfully  running a hunt-the-lady scam in the street.  They are the masters of the universe and those who lose out are suckers.   There is zero concern for or even awareness of the greater general good of a society in the film.

The protagonists in Wall Street are a young stock trader Bud Fox, and a corporate  raider  Gordon Gecko.  Bud idolises Gecko and manages to work his way into Gecko’s circle by passing on privileged information to him, information which he has received from his father Carl who is a union leader at Bluestar Airlines.

Once inside Gecko’s circle  Bud  sheds  his morals and is content to help Gecko  engage in insider trading until the point where he discovers that he is being used as a catspaw by Gecko , who is trying to take over Bluestar  to dissolve the company in order to access cash in the company’s overfunded pension plan. Bud rediscovers his conscience after a fashion and outmanoeuvres Gecko by making an agreement with  Wildman – whom  previously he had helped Gecko to  defraud  through insider trading when Wildman wanted to take over a steel company –  to buy a majority shareholding in  the airline on the cheap  and run it as a going concern.  In doing this his  motivation is more revenge for being betrayed than suddenly being disgusted with what he had become under Gecko’s influence.

DiCaprio’s Jordan Belfort is a trader who loses his job  with a Wall Street broker when the firm crashes, moves into boiler-room trading in penny shares (which are barely regulated and allow for huge commissions to be charged to naïve investors who are often buying shares which are next to worthless). He makes a small fortune doing this.

Belfort then decides to strike out on his own account in rather more up-market  surroundings. With a friend , Donnie Azoff (Jonah Hill),  he sets  up  a suitably Ivy league sounding firm of brokers Stratton Oakmont.  They operate on the principle of “pump and dump”  (artificially inflating a company’s share price by tactics such as spreading false rumours or simply buying heavily and then selling the shares rapidly). Stratton Oakmont is given lift off by an article in Forbes magazine which calls Jordan a ‘twisted Robin Hood and the “Wolf of Wall Street”,  which appellations prove a first rate recruiting sergeant for Stratton Oakmont  with hundreds of young stock traders flocking to make money with him.  From that point on he becomes seriously rich.

What the films do admirably  is show the difference between the cinematic portrayal of  the American financial world  in films released  in 1987 and 2013.   To refresh my memory I watched Wall Street again before writing this review. The striking thing about the film is how restrained it is compared with TWOWS.

Michael Douglas’  Gordon Gecko is far more disciplined than DiCaprio’s Belfort.  He  has some semblance of intellectual and arguably even moral  justification for what he does, most notably in a scene where he is addressing a shareholders’ meeting of a company he is trying to take over. This is where Gecko utters the most famous words in the film “Greed is good”. The words have serious context. Gecko is peddling  the laissez faire  line that competition is an unalloyed good because it is the agency which creates natural selection amongst companies and it is only that which keeps an economy healthy. He also  puts his finger on a real  cancer in big business: the development of the bureaucratic company where the company is run for the benefit of the senior management rather than the shareholders. Gecko  rails against  the huge number of senior managers on  high salaries  in  the company he wishes to buy, a business  which has done little for its shareholders.  Whether you agree with the raw natural selection argument in business  – and I do not – at the very least it shows that the likes of Gecko feel the need to  justify what they do, to provide an ethical cloak for their misbehaviour.

There is also a serious difference in the general behaviour of  Gecko and Belfort.  Gecko  for all his faults is not a libertine. For him money is both an instrument and an end in itself. It gives him power and status, a medal of success in his eyes and the eyes of the world he inhabits.  There is purpose in Gecko.  He enjoys the material trappings of wealth but is not overwhelmed by them. In Belfort there is merely an ultimately empty grasping of licence  with drugs,  whores  and absurd status symbols such as an outlandishly large yacht , which his ego drives him to wreck by ordering the ship’s captain to sail in weather which the captain tells him is unsafe to sail in. He acquires a trophy girlfriend , He dumps his wife. There is no solid foundation to any part of his life.

The other big general difference between the films is ethical.  Wall Street has a moral voice which acts  as a  foil to Gecko’s amorality.   Bud Fox’s father Carl puts the case against capitalism red in tooth and claw. After Bud’s  discovery of Gecko’s attempt to buy Bluestar Carl’s dissenting ideological  voice  is added to by Bud. In TWOWS there is no moral voice or pretence by Belfort (or any other character) that what they are doing has any social function or ethical content. Instead the public are simply viewed as a bovine herd to be milked as ruthlessly as possible.  The fact that what is being done – whether it be selling penny stocks in a boiler room or using insider information in more sophisticated company –  is no better than a confidence trick does not cause Belfort and his fellow participants the slightest discomfort only unalloyed joy. They are getting rich at the expense of suckers. It’s all a game whose only end is to make the individual rich and to be rich is a validation of their existence.

Gecko and Belfort end up in prison, so in that respect at least they honour the old American  film tradition of never showing the criminal getting away with it, although  in the case of Belfort he ends up in a place which is not so much a prison as a country club.

Both films are strong in all the technical ways – script, plot, characterisation and acting – that are used to judge films. Michael Douglas’ is a more studied performance than that of  diCaprio who brings an amazing energy to the role.  But arresting as Douglas’ performance is  the film the film has ample space to fill out other characters. Indeed, in terms of screen time it is Bud who wins out.

DiCaprio’s   Belfort has strong claims to be the  best performance in an already  long career, but it utterly dominates the film and consequently the other characters have little room to develop than TWOWS.  They either remain one rather dimensional or like Matthew McConaughey  appear only in cameos.

The quality of the films as films is reason enough to watch them, but their primary value , as a pair,   is their charting, unwittingly,   of the decline of moral  sense between the 1980s and now.

 

 

 

 

 

 

 

How the BBC fixes the political bias of Any Questions

Robert Henderson

The programme is fixed generally because all those invited will on subjects such as race, immigration, homosexuality and feminism  toe the pc line to a large degree. (Ask yourself when was the last time you heard someone on Any Questions saying that mass immigration is an unalloyed ill). They will do this either from ideological conviction or the fear of the consequences if they become accused of a pc “crime”.

There is also a more particular built in bias which will generally result in preponderance politically correct  and left leaning answer. To demonstrate this I have compiled  the details of panel members  for a couple of recent two month runs of Any Questions – June-July 2013 and January-February 2014 (17 programmes). These details are shown at the bottom of this blog post.

Then there are  the biases produced by race, ethnicity and employment. Those who are there as right leaning representatives,  but are immigrants or the children of immigrants, members of a racial or ethnic minority or compromised by receiving public money or favours such as those bestowed on the quangocracy will often be left leaning in certain areas such as the desirability of mass immigration or the worth of public service, regardless of their nominal political orientation.

In the four months covered by the two periods chosen, the leftist, politically correct bias is clear: on every panel at least two (half the panel) of the participants are formally left leaning and in a number of cases more than two. A good example is the 28 2 2014 programme where at least three members (Hughes, Eagle, Greer)  are of the left and arguably all four because Chua being the child or immigrants and a member of an ethnic minority will in many areas automatically be pc (for example immigration)  even if she has some non pc ideas as well.

There is no example of any programme with more than two right leaning members  on it. Moreover, many of those classified as right-leaning will be right leaning only in the area of economics and even there someone who supports laissez faire economics is veering into the leftist world because the effects of globalism feed into the liberal left internationalist credo.

It is also noteworthy that although there are a few members of panels who may  reasonably be categorised as of the hard left, for example, Diane Abbott and Laurie Penny,   there is no one who represents the far right.

It is reasonable to suspect that the BBC packs all its audiences for political and current affairs programmes in a  similar way.

28 2 2014

The Bath Literature Festival with Justice Minister Simon Hughes MP, Shadow Secretary of State for the Environment Food and Rural Affairs Maria Eagle MP, Yale Law professor and author Amy Chua, and writer and broadcaster Germaine Greer.

Political count: two left-leaning MPs (Hughes and Eagle), an immigrant and radical feminist (Greer) and an ethnic minority representative  and child of immigrants to the USA (Chua).

21 2 2014

Blundells School in Tiverton, Devon, with Secretary of State for Scotland and Lib Dem MP Alistair Carmichael, Conservative backbench MP Nadhim Zahawi MP, New Statesman columnist Laurie Penny and Labour backbench MP Frank Field.

Political count: two left leaning MPs (Field and Carmichael ), one ethnic minority  immigrant  and right leaning MP (Zahawi) and one member of the hard left (Penny).

14 2 2014

Central Hall Methodist Church in Walsall with Chairman of the Home Affairs Committee Keith Vaz MP, Fisheries and Farming Minister George Eustice MP, Pauline Black from The Selecter and UKIP Party Director Lisa Duffy.

Political count: ne Left leaning MP, immigrant  and ethnic minority representative (Vas), one right leaning  MP (Eustice), one ethnic minority  representative  (Black) and  one right leaning representative from a minor party (Duffy).

7 2 2014

Altrincham Grammar School for Girls with Defence Minister and Tory MP  Anna Soubry, journalist and poverty campaigner Jack Monroe, the Liberal Democrat MP Jeremy Browne and the Former Foreign Secretary Jack Straw MP.

Political count: one Tory MP but with a strong streak of political correctness (Soubry), two left leaning MPs (Browne and Straw) and one leftist journalist and campaigner (Monroe).

31 1 2014

Purfleet in Essex with the Secretary of State for Communities and Local Government Eric Pickles MP, Labour backbencher Diane Abbott MP, author and columnist Simon Heffer and the new Green party peer Baroness Jenny Jones

Political count: one centrist Tory MP (Pickles), one hard left MP who is the  daughter of immigrants  and an ethnic minority representative (Abbott), one right leaning journalist (Heffer) and , one hard left peer, (Jones).

24 1 2014

Gwyn Hall in Neath, with the First Minister of Wales, Carwyn Jones, Jill Evans Plaid Cymru MEP for Wales, Conservative Vice Chairman for Campaigning, Michael Fabricant MP, and the former leader of the Liberal Party Lord Steel.

Political count: two  left leaning politicians (Jones and Evans) and one right leaning  MP (Fabricant) and one left leaning peer (Steel).

17 1 2014

Greenbank High School in Southport with the former Chief Whip Andrew Mitchell MP, Shadow Secretary of State for Health Andy Burnham, Supermarket Ombudsman Christine Tacon and Liverpool based textiles businessman Tony Caldeira.

Political count:  one right leaning MP (Mitchell), one left leaning MP (Burnham), one member of the Quangocracy (Tacon) and one businessman who is a Tory Party supporter (Caldeira).

10 1 2014

Heythrop College in London with Justice Secretary Chris Grayling MP, Shadow Justice Secretary Sadiq Khan MP, Patrick O’Flynn the new Communications Director for UKIP and former coalition minister the Liberal Democrat MP Sarah Teather.

Political count: two left leaning MPs (Khan and Teather), one right leaning Tory MP (Grayling) and one rightist representative for a minor party (O’Flynn).

27 7 2013

Endellion, Cornwall with Lord Hattersley, writer Jessica Mann, Times columnist Phil Collins and Jacob Rees Mogg MP.

Political count: one leftist peer (Hattersley), one rightist MP (Rees-Mogg), one immigrant  who has been part of Quangocracy (Mann), one left leaning journalist (Collins) .

19  7 2013

Bridport in Dorset with Lord Ashdown, Kate Hoey MP, Baroness Julia Neuberger and former Chancellor of the Exchequer Lord Lawson.

Political count: two left leaning peers (Ashdown and Neuberger), one centrist Tory peer (Lawson) and one left leaning MP (Hoey). Neuberger is the daughter of an immigrant mother and a member of an ethnic minority.

12 7 2013

Bushey in Hertfordshire with Chuka Umunna Shadow Business Secretary, Vice Chairman of the Society of Business Economists Bronwyn Curtis, Grant Shapps Chairman of the Conservative Party and the Speaker’s Chaplain the Reverend Rose Hudson-Wilkin.

Political count: one left-leaning immigrant and member of an ethnic minority MP  (Umunna), One immigrant Australian economist (Curtis), one right leaning MP (Shapps) and one ethnic minority immigrant representative (Rose Hudson-Wilkin).

5 7 2013

from Keswick in the Lake District with Liberal Democrat President Tim Farron, Shadow Europe Minister Emma Reynolds MP, Deputy leader of UKIP Paul Nuttall and Leader of the 1922 Committee Graham Brady MP.

Political count: two left leaning MPs (Farron and Reynolds), one right leaning member of a minor party  (Nuttall) and one right leaning MP (Brady).

28 6 2013

Titchfield in Hampshire with John Denham MP, Chair of the Public Administration Select Committee Bernard Jenkin MP, Chair of the Bar Council Maura McGowan QC and Minister of State for Justice Lord McNally.

Political count: one left leaning MP (Denham), one right leaning MP (Jenkin), one criminal lawyer  with no obvious political affiliation (McGowan) and , one left leaning peer (McNally).

21 6 2013

Purley in Croydon. The panel are Labour peer Baroness Oona King; editor of Prospect magazine Bronwen Maddox, Foreign and Commonwealth minister Alistair Burt and the novelist, journalist and human rights activist Joan Smith.

Political count: one left leaning ethnic representative peer (King), one right leaning journalist (Maddox), one right leaning MP (Burt) and one left leaning journalist (Smith).

14 6 2013

Great Yarmouth Racecourse in Norfolk with Daniel Hannan MEP, commentator Mehdi Hasan, Communities and Local Government Minister Don Foster MP and Shadow Secretary of State for the Environment, Food and Rural Affairs Mary Creagh MP.

Political count: one right leaning MEP (Hannan), one son of immigrants and left leaning ethnic minority representative journalist (Medhi Hassan) and two left leaning MPs (Foster and Creagh)

7 6 2013

The Centre for Alternative Technology in Machynlleth, Wales with Secretary of State for Environment, Food and Rural Affairs Owen Paterson MP, Labour’s Peter Hain MP, Leader of Plaid Cymru Leanne Woods, and commentator James Delingpole.

Political count: one right leaning MP (Paterson) one left leaning MP (Hain), one hard left representative (Woods)  and one rightist journalist (Delingpole).

1 6 2013

Slough in Berkshire. The panel includes the Secretary of State for Northern Ireland Theresa Villiers MP, the director of the think-tank British Future Sunder Katwala, Business woman Julie White and Labour peer Lord Adonis.

Political count: one right leaning MP (Villiers), one left leaning ethnic minority representative who is the son of immigrants (Katwala), one business woman whose company D-Drill gets a good deal of its work from government (White) and one left leaning peer (Adonis).

What the British people want from their politicians… and what they get

Robert Henderson

What do our politicians think of the electorate: precious little. All the major mainstream parties either ignore or cynically  misrepresent  the issues  which are most important to the British – immigration, our relationship with the EU, the English democratic deficit,  foreign adventures , the suppression of free speech and the precarious state of the economy. . These issues are  not addressed honestly because they either clash with the prevailing internationalist agenda or because to address them honestly would mean admitting how much sovereignty had been given away to the EU and through other treaties.

This antidemocratic failure to engage in honest politics is an established trait. The wilful removal from mainstream politics of vitally important issues has been developing for more than half a century. The upshot is that the British want their politics to be about something which is not currently on offer from any party with a chance of forming a government. The British public broadly seek what these days counts as rightist action when it comes to matters such as preserving nationhood, immigration, race and political correctness, but traditional leftist policies on items such as social welfare, the NHS and the economy (has anyone ever met someone in favour of free markets and free trade who has actually lost his job because of them?).

The electorate’s difficulty is not simply their inability to find a single party to fulfil all or even most of their political desires. Even on a single issue basis, the electorate frequently cannot find a party offering what they want because all the mainstream parties now carol from the same internationalist, globalist, supranational, pro-EU, pc songsheet. The electorate finds they may have any economic programme provided it is laissez faire globalism, any relationship with the EU provided it is membership, any foreign policy provided it is internationalist and continuing public services only if they increasingly include private capital and provision. The only difference between the major parties is one of nuance.

Nowhere is this political uniformity seen more obviously than in the Labour and Tory approaches to immigration. Labour has adopted a literally mad policy of “no obvious limit to immigration”. The Tories claim to be “tough” on immigration, but then agree to accept as legal immigrants more than 100,000 incomers a year from outside the EU plus any number of migrants from within the EU (350 million have the right to settle here). There is a difference, but it is simply less or more of the same. Worse, in practice there would probably be no meaningful difference to the numbers coming whoever is in power. The truth is that while we remain part of the EU and tied by international treaties on asylum and human rights, nothing meaningful can be done for purely practical reasons. But even if something could be done, for which serious party could the person who wants no further mass immigration vote? None.

A manifesto to satisfy the public

All of this set me thinking: what manifesto would appeal to most electors? I suggest this political agenda for the What the People Want Party:

We promise:

1. To always put Britain’s interests first. This will entail the adoption of an unaggressive nationalist ethic in place of the currently dominant internationalist ideology.

2. The reinstatement of British sovereignty by withdrawal from the EU and the repudiation of all treaties which circumscribe the primacy of Parliament.

3. That future treaties will only come into force when voted for by a majority in both Houses of Parliament and   accepted in a referendum . Any  treaty should be subject to repudiation following  Parliament passing a motion that repudiation should take place and that motion being ratified by a referendum.  Treaties could also be repudiated by a citizen initiated referendum (see 29).

4. A reduction in the power of the government in general and the Prime Minister in particular and an increase in the power of Parliament. This will be achieved by abolishing the Royal Prerogative, outlawing the party whip and removing the vast powers of patronage available to a government.

5. That the country will only go to war on a vote in both Houses of Parliament.

6. An end to mass immigration by any means, including asylum, work permits and family reunion.

7. An end to all officially-sponsored political correctness.

8. The promotion of British history and culture in our schools and by all publicly-funded bodies.

9. The repeal of all laws which give by intent or practice a privileged position to any group which is less than the entire population of the country, for example the Race Relations Act..

10. The repeal of all laws which attempt to interfere with the personal life and responsibility of the individual. Citizens will not be instructed what to eat, how to exercise, not to smoke or drink or be banned from pursuits such as fox-hunting which harm no one else.

11. A formal recognition that a British citizen has rights and obligations not available to the foreigner, for example, the benefits of the welfare state will be made available only to born and bred Britons.

12. Policing which is directed towards three ends: maintaining order, catching criminals and providing support and aid to the public in moments of threat or distress. The police will leave their cars and helicopters and return to the beat and there will be an assumption that the interests and safety of the public come before the interests and safety of police officers.

13. A justice system which guards the interests of the accused by protecting essential rights of the defendant such as jury trial and the right to silence, whilst preventing cases collapsing through technical procedural errors.

14. Prison sentences that are served in full, that is,  the end of remission and other forms of early release. Misbehaviour in prison will be punished by extending the sentence.

15. An absolute right to self-defence when attacked. The public will be encouraged to defend themselves and their property.

16. A general economic policy which steers a middle way between protectionism and free trade, with protection given to vital and strategically important industries such as agriculture, energy, and steel and free trade only in those things which are not necessities.

17. A repudiation of further privatisation for its own sake and a commitment to the direct public provision of all essential services such as medical treatment. We recognise that the electorate overwhelmingly want the NHS, decent state pensions, good state funded education for their children and state intervention where necessary to ensure the necessities of life. This promise is made to both reassure the public of continued future provision and to ensure that the extent of any public spending is unambiguous, something which is not the case where indirect funding channels such as PFI are used.

18. The re-nationalisation of  the railways, the energy companies, the water companies and any  exercise  of the state’s authority such as privately run prisons which have been placed in  private hands.

19. An  education system which ensures that every child leaves school with at least a firm grasp of the three Rs and a school exam system which is based solely on a final exam. This will remove the opportunity to cheat by pupils and teachers. The standards of the exams will be based on those of the 1960s which is the last time British school exams were uncontaminated by continuous assessment, multiple choice questions and science exams included practicals as a matter of course. .

20. To restore credibility to our university system. The taxpayer will fund scholarships for 20 per cent of school-leavers. These will pay for all fees and provide a grant sufficient to live on during term time. Any one not in receipt of a scholarship will have to pay the full fees and support themselves or take a degree in their spare time. The scholarships will be concentrated on the best universities. The other universities will be closed. This will ensure that the cost is no more than the current funding and the remaining universities can be adequately funded.

21. A clear distinction in our policies between the functions of the state and the functions of private business, charities and other non-governmental bodies. The state will provide necessary public services, business will be allowed to concentrate on their trade and not be asked to be an arm of government and charities will be entirely independent bodies which will no longer receive public money.

22. A commitment to putting the family first. This will include policies which recognise that the best childcare is that given by the parents and that parents must be allowed to exercise discipline over their children. These will be given force by a law making clear that parents have an absolute right to the custody of and authority over their children, unless the parents can be shown to be engaging in serious criminal acts against their children.

23. Marriage to be encouraged by generous tax breaks and enhanced  child allowances for children born in wedlock.

24. Defence forces designed solely to defend Britain and not the New World Order.

25. A Parliament for England to square the Devolution circle. The English comprise around 80 per cent of the population of the UK, yet they alone of all the historic peoples are Britain are denied the right to govern themselves. This is both unreasonable and politically unsustainable in the long-run.

26. A reduction to the English level of Treasury funding to Scotland, Wales and Northern Ireland. This will save approximately £17 billion pa because the Celts receive overall approximately £1,600 per head per annum more than the English.

27. An end to Foreign Aid. This will save approximately £11  billion.

28. A written constitution to ensure that future governments cannot abuse their power. This will be predicated on (1) the fact that we are a free people, (2) the belief that in a free and democratic society the individual can be trusted to take responsibility for his or her actions and to behave responsibly and (3) that politicians are the servants not the masters of those who elect them. It will guarantee those things necessary to a free society, including an absolute right to free expression, jury trial for any offence carrying a sentence of more than one year, place citizens in a privileged position over foreigners and set the interests and safety of the country and its citizens above the interests and safety of any other country or people.

29. Citizen initiated referenda shall be held when ten per cent of the population have signed a petition asking for a referendum.

Those are the things which I think most of the electorate could embrace, at least in large part. There are also other issues which the public might well be brought to  support if there was proper public debate and a serious political party supporting them such as the ownership and bearing of weapons and the legalisation of drugs.

The positive thing about such an agenda is that either Labour or the Tories could comfortably support it within the context of their history.

Until Blair perverted its purpose, the Labour Party had been in practice (and often in theory – think Ernie Bevin), staunchly nationalist, not least because the unions were staunchly protective of their members’ interests and resistant to both mass immigration (because it reduced wages) and free trade (because it exported jobs and reduced wages).

For the Tories, the Thatcherite philosophy is as much an aberration as the Blairite de-socialisation of Labour. The true Tory creed in a representative democracy is that of the one nation nationalist. It cannot be repeated too often that the free market internationalist creed is the antithesis of conservatism.

The manifesto described above would not appeal in every respect to ever member of the “disenfranchised majority”. But its general political slant would be palatable to that majority and there would be sufficient within the detail to allow any individual who is currently disenchanted with politics to feel that there were a decent number of important policies for which he or she could happily vote. That is the best any voter can expect in a representative democracy. People could again believe that voting might actually change things.

Royal Mail privatisation – an act of ideology not of necessity or prudence

Robert Henderson

The announcement of the privatisation of the Royal Mail  by  the Business Secretary Vince Cable (http://www.telegraph.co.uk/news/uknews/royal-mail/10172284/Royal-Mail-lined-up-for-3bn-float.html)  is the marriage of the Thatcherite  privatising Zombie which has infected the whole of the mainstream British politics linked to the mania for “competition” exhibited by the EU (http://ec.europa.eu/competition/sectors/postal_services/overview_en.html).  The two ideologies – that of market economics and the goal, pursued with pathological determination,  of an ever expanding equalisation of trading conditions throughout the EU dovetailed perfectly.

The public sees Royal Mail as a public service. This is unsurprising because it has been in public hands since the 17th century and the provision of a universal delivery service to every part of the country for a standard charge existed from the time  Rowland Hill invented the postage stamp and the penny postage in the mid 19th century until the EU  interfered and ended the monopoly on letter post and small parcels in 2010.

There are clearly much broader questions of social  utility  than the cost or otherwise to  the taxpayer.  But even on the narrow and vulgar question of cost to the taxpayer there is no solid case for privatisation. Provided the letter post and packages up to a size which encompasses  the large majority of packets sent is  kept as a state monopoly,  the service could be relied upon to remain in the black whilst keeping postal charges low.  Even with the considerable weakening of Royal Mail’s monopoly over recent years it is still delivering healthy profits, viz: “ The state-owned delivery company said pre-tax profits jumped to £324m from £201m last year and a loss of £165m in 2011. Underlying operating profits soared 165pc to £403m from £152m in 2012” ( http://www.telegraph.co.uk/news/uknews/royal-mail/10070998/Royal-Mail-delivers-profits-fit-for-flotation.html).

It is true that letter numbers have  declined  considerably in recent  years, by 25% between 2006 and the end of 2012. Nonetheless, the volume is still considerable  with 16 billion letters being sent to 28 million addresses  in 2012 (http://media.ofcom.org.uk/2012/03/27/ofcom-announces-measures-to-safeguard-the-uks-universal-postal-service/). Even with the ever growing use of digital communications, it is difficult to see letters dwindling to an insignificant number in the near future. Moreover, a good deal of the recent letter decline can be attributed to the ever growing cost of postage,  with second class mail for small letters now being 55p (large letters 69p) and first class  mail  60p (large 90p) (http://www.royalmailgroup.com/first-and-second-class-stamp-letter-prices-unchanged). In 1840 when the penny post was introduced a letter of any size could be sent for one old  penny. At 2012 prices that would be 87 old pence today (7/3) , or 36 new pence.  (http://www.bankofengland.co.uk/education/Pages/inflation/calculator/).  In real terms the  modern cost of a first class large letter is nearly three times as much as its 1840 predecessor. Bearing in mind the benefit of modern sorting technology  and transport and a great reduction in the number of deliveries per day,  it is rather surprising that the cost of post has risen hugely in real terms in modern times rather than dropping.

Parcel post costs have also risen sharply for those sizes of parcel  most likely  to be used: “2kg [parcel] was previously £5.30, but this will now rise to £8 if it is bigger than 45cm by 35cm by 8cm.” (2013  –  http://www.telegraph.co.uk/news/politics/9965562/Cost-of-posting-parcels-to-rise.html and http://internetretailing.net/2013/04/online-retailer-speaks-out-as-royal-mail-changes-parcel-pricing/#sthash.4EFUCLqr.dpuf) )

These price rises have been permitted by the regulator Ofcom simply to prepare the Royal Mail for privatisation. If Royal Mail remained in public hands, with the old letter post and small parcel monopolies restored, the cost of postage could be reduced considerably because profit would not be a prime driver of the cost . In fact, with the current profits being made, even if the present situation was maintained substantial postage price reductions could be made.  The current large profits are only needed to make Royal Mail  attractive to prospective buyers of the business.

But even If the worst came to the worst and Royal Mail regularly made a loss, and the taxpayer had to  directly subsidize the cost, this would still be a benefit to the general public because it would ensure that an important public service was maintained at a price the public could afford.

The really good news for those who want  Royal Mail to stay as a public service is the immense growth in parcel post because of the already hugely expanded and ever expanding increase in Internet buying. In May 2013 this accounted for 9.7% of all retail spending excluding automotive fuel (http://www.ons.gov.uk/ons/rel/rsi/retail-sales/may-2013/stb-rsi-may-2013.html#tab-Internet-Sales). There is every reason to believe it will continue to grow substantially as people get more and more comfortable with buying online and the opportunities to buy in shops diminishes as more and more close The Centre for Retail Research estimates that stores will decline  from 281,930 today to 220,000 in 2018, a decline of 22% (http://www.retailresearch.org/retail2018.php).  This growth in parcel post will more than cancel out the reduction in revenue from  letters.

Practically allied to Royal Mail is the Post Office . Until  April 2012 Royal Mail and the Post Office were  effectively part of the same organisation, albeit as agencies of varying status. (http://www.publications.parliament.uk/pa/cm201213/cmselect/cmbis/84/8405.htm).  Now the Post Office is to be, legally, an entirely separate state-owned organisation.

A Commons committee in 2012  recognised  its public service function: “The Post Office remains an essential service which is extensively used. A third of the UK population—just under 20 million people—and half of all small businesses visit one of over 11,500 post offices every week.] The Post Office is one of the country’s largest cash handlers, processing around £70 billion of cash and £636 million of coinage every year. “

(ibid)

The official view of the Post Office networks future is rosy: “[In 2012] Paula Vennells, Chief Executive of Post Office Ltd, supported the proposals and set out her ambition for the Post Office:

If I have a vision, it is to have 30,000 post office outlets, not 11,500. It is to have standalone electronic drop boxes for mail packets. It is to have ATMs in railway stations. It is to have identity kits in town halls and libraries, all branded ‘Post Office’. But until we transform the current network and make it more sustainable, that becomes just an ambition.” (ibid)

This seems wildly improbable in the context of a privatised Royal Mail.  Although  a ten year deal to maintain the existing Post Office network was agreed by the government in 2012,   it is probable that the network will be severely reduced in the not too distant future . It has already suffered a considerable contraction –  there are 11,500 Post Offices now compared with 20,000 in 1990. Many of the remaining offices,  and especially the  sub-post offices,  are struggling   because government services such as TV licence renewal have been removed from the Post Office remit and  there is a  general move towards online government services (in which the user increasingly has no choice but to use the online service) will worsen  the lot of Post Offices, especially the sub-post offices. (http://www.thisismoney.co.uk/money/news/article-1678139/Post-offices-death-by-a-thousand-cuts.html).   Politically it will be much easier to reduce a stand alone state-run Post Office network  in size or even do away with all together than one attached in some way to the Royal Mail, especially if the privatised Royal Mail and its other private competitors decide not to use  Post Offices  as parcel pickup points and the government can keep pointing the Post Office network as “a burden on the taxpayer”.   The network It does require a public subsidy but this is minute in the context of national expenditure – it was  £150 million in 2010/11 ((http://www.publications.parliament.uk/pa/cm201213/cmselect/cmbis/84/8405.htm)

There is little experience of privatised postal services  because there are few anywhere  in the world and those that have been privatised – Sweden, Finland and New Zealand – have only done so within the last 20 years.   However, a 2007 European Commission report on the liberalisation of postal services within the EU  found a common theme, namely, a reduction in post offices and increased postal charges (http://www.boeckler.de/pdf/wsi_pj_piq_post_europe.pdf).  That is exactly what is to be expected when private operators are allowed  into a state service.

Does anyone  honestly doubt that privatisation will make matters worse? After all, every major British privatisation of public  services,  apart from telecommunications  where there can be real competition,  has resulted in higher charges for at best unimproved and at worst inferior services.  Why should this privatisation be any different?

Here is a media doubter Vikki Woods writing for the free market Daily Telegraph  : “ Vince Cable said in the Commons that the time had come for the Government to step back from Royal Mail and allow its management to focus on growing the business. The sell-off “is practical, it is logical, it is a commercial decision… It is consistent with developments elsewhere in Europe where privatised operators produce profit margins far higher than the Royal Mail but have continued to provide high-quality and expanding services.” Oh, yes? He says “expansion” but I hear “shrinkage”. The universal service obligation was only five days across Europe back in 2011, and now various national mail companies are sucking their teeth and suggesting three days a week would be good. “(http://www.telegraph.co.uk/earth/countryside/10176212/Our-postman-delivers-a-sack-of-bad-news.html).

I suspect that many will have the same fears.

The Royal Mail is already much diminished from what it was. There is only one delivery a day; the cost of postage has risen massively  and much of the Post Office counter service which includes a good deal of postal work – recorded and registered letters, airmail, special delivery and so on –  has gone because of the massive reduction in Post Offices.   How long before the universal letter post obligation is reduced from six days to three days or two days? How long before a single universal charge for the whole country is abolished and hard to service areas such as the countryside are charged much more than the cities?  How long before door-to-door letter post  deliveries are replaced by deliveries to central collection points ?

Privatisation is a fraud on the public for its is selling that which belongs to everyone.  Where privatisation of state assets involves selling them  to the general public  it is a confidence trick on a par with the conman who “sells”  Nelson’s Column to  tourist.   Britons  who purchase shares in a privatised company are buying what they already own.  Think about that fact and don’t be a sucker.

The public is being doubly stung with this privatisation.  Not only will they almost certainly have, based on the experience of privatised postal services abroad, a more expensive and less comprehensive service within the foreseeable future, the funding of accrued Royal Mail pensions up to 31 March 2012 will remain as a charge on the taxpayer (http://www.royalmailpensionplan.co.uk/) rather than the new privatised company.  In short, the taxpayer is left with the debts while the buyers of  Royal Mail walk away unencumbered with the historical pension obligations.

This is something which does not need to happen. It would be perfectly possible to retain a state-owned universal postal service which would not make a loss, would make sufficient money to keep modernising  and would be much cheaper to use. All that would  be required is the political will to say no to the EU and revert to the old letter and smaller parcel monopoly.  This  privatisation is simply an ideological decision and has nothing to do with the  viability of a state-run postal service in this country.

This could well be a highly unpopular privatisation because the public  overwhelmingly view  Royal Mail as a service and have become jaundiced by previous large privatisations such as the energy and water industries, all of which have  resulted in raised prices and no great improvement in the service they provide. It could  well cost the Tory and Lib Dem parties dear at the next election.   (http://www.telegraph.co.uk/news/uknews/royal-mail/10050074/Poisonous-privatisation-of-Royal-Mail-will-cost-the-Conservatives-votes-in-2015-Bow-Group-warns-Tory-MPs.html). If it does, they will have only themselves to blame.

How much public money is being stolen and wasted because of the privatisation of public services?

Robert Henderson

In June this year I attended a talk given by Michael Heseltine. It was embarrassingly limp re-hashed Heseltinian fare from the 1980s,with Heseltine airily advocating localism in place of centralised government with precious little idea of how  to engineer his envisaged  utopia of local politicians free from the Westminster party embrace mixing with banks,  Chambers of Commerce and other trade bodies to bring about a Nirvana of self-help and self-determination. (http://englandcalling.wordpress.com/2013/06/18/michael-heseltine-rebalancing-the-british-economy/).  Thankfully,  the Coalition thought so little of Heseltine’s proposals in his Government commissioned report No Stone Unturned that only the derisory sum of £2 billion (Heseletine had asked for £49 billion) was allocated to his recommendations for devolved power and expenditure  to promote growth (http://www.telegraph.co.uk/news/politics/spending-review/10144584/Spending-Review-2bn-to-boost-regional-growth.html). It would have been less insulting if the Coalition had allocated nothing.

When the opportunity came for questions I raised  the matter of  increasing corruption in the spending of public money.  This is a consequence of taxpayers’ money going to private contractors at an ever more alarming rate as the mania for putting out public services to private companies and not-for-profit organisations such as charities  continues  unabated,  despite the ample evidence that contracting-out is generally very poor value for the taxpayer.  My argument was simple: the greater the number of public contracts being put out to tender by commercial businesses and not-for-profit organisations, the greater the opportunities for corruption by either public employees and contractors colluding or contractors fixing things amongst themselves.  Human nature being what it is, greater opportunities for fraud inevitably means greater instances of  fraud.

Heseltine reacted with considerable vehemence to my suggestion that serious corruption might exist in public service saying that he “took great exception” to the idea.  His denial rang hollow because sadly there is a constant flow  of publicly reported frauds by those receiving public money.   Here are a few recent examples of  alleged frauds:

1. Pharmacists and drug companies colluding to overcharge the NHS for drugs http://www.telegraph.co.uk/health/healthnews/10133557/Pharmaceutical-scandal-The-NHS-the-drug-firms-and-the-price-racket.html.    The amounts in this case are potentially very large: “The Daily Telegraph’s investigation has found that companies are privately offering discounts of up to 70 per cent on drug tariff items to high-street chemists, with the pharmacist keeping the difference. For example, the NHS would agree to pay £100 for a drug that would be supplied to a chemist for only £30.” (http://www.telegraph.co.uk/health/healthnews/10135897/Pharmaceutical-scandal-firms-boast-of-profits-on-drugs-that-cost-pennies.html).

2. Former government education adviser Tim Royle  arrested on suspicion of fraud when he was a headmaster ( http://www.telegraph.co.uk/education/10130632/Former-government-education-adviser-arrested-on-suspicion-of-fraud.html).

Sometimes  misbehaviour  is judged to have fallen short of the criminal, but it still costs the taxpayer money.  A good example is that of  one-time award-winning  head teacher Jo Shuter  who  left herself open to suspicion and criticism by  inappropriate spending  and the employment of  relatives. She resigned but not before   being given a final warning  for “financial and human resource mismanagement”  (http://www.standard.co.uk/lifestyle/london-life/jo-shuter-there-was-a-blurring-of-my-personal-and-professional-worlds-it-was-incredibly-stupid-8664781.html)

I can give two examples of questionable public contracts involving a great deal of money  which I personally tried unsuccessfully to bring to public notice. Both involved Camden Council, the London borough in which I live. The first occurred in 2003 when the Council announced that they were to replace 14,000 kitchens and bathrooms in their council housing stock.  In response to a question I put to him at a public meeting  Neil Litherland, the then director  of Housing in Camden , quoted me £6,000 for each room (£12,000 for a kitchen and bathroom combined).  The bathroom and kitchen units Camden  proposed to fit were pretty basic. The total cost at that price was £168 million (at 2003 prices).  This struck me as outlandishly expensive, so   I went to a local high street fitted furniture retailer to get a  quote.

At the retailer  I  selected units of the same quality as those proposed by the Council and  was quoted £1,500 for each room, including the installation of the kitchen and bathroom units.   That was for a single retail sale. A contract for 14,000 properties should  result in a very substantial discount below a retail sale, but even at the retail price quoted the contract would have been a quarter of the Camden quoted figure.

When I made my complaint to Camden,  I doubled the £1,500 quoted by the retailer because Camden were doing other renovation work such as re-wiring and laying new vinyl on the floors in the kitchens and bathrooms as well as fitting the new kitchen units and bathroom suites.  The extra  £1,500 per room for this  renovation work was almost certainly far too much,  but even  at £3,000 per room  Camden  would have been halved their actual bill saving £84 million.

A  disinterested person reading that account might think the local politicians and the MP for area would have been biting my hand off to take up the case and stop the grossly overpriced contract going through. I could not find a single politician to take up the matter. Nor could I get even the local papers to investigate the matter.

The second case involved what is now known as the Francis Crick Institute. (http://ukcmri.wordpress.com/2012/11/11/links-to-all-ukcrmi-blog-posts/).  This is a gigantic medical  research laboratory currently being constructed on land behind the British Library. The site is  a road’s width from the Eurostar terminus.  There are excellent grounds for opposing the building of such a laboratory because it will be dealing with level 4 (the highest biohazard level) toxins.  This poses a risk of dangerous materials being released  (through a terrorist attack or carelessness)  into an area which is both heavily residential and arguably the busiest transport hub in London.  However, that is not the important thing in the context of corruption.

In an attempt to stop the building of the laboratory I used the Freedom of Information Act (FOIA) to gain details of the sale of the land on which the laboratory is being built. The land belonged to the taxpayer and was under the stewardship of the Department of Culture, Media and Sport (DCMS). The site   was put out to competitive tender and a good deal of interest was shown (27 bids, including the likes of Barratt Homes and   Oracle Group  – http://ukcmri.wordpress.com/2011/02/11/the-full-list-of-bidders/).  The decision was solely in the hands of the Secretary of State for the DCMS who was exercising a quasi-judicial role in the matter.  Despite this, documents I obtained using the FOIA unambiguously show Gordon Brown when PM illegally interfering with the bidding process  from before the closing date for bids and carrying on interfering until the sale was complete (http://ukcmri.wordpress.com/2011/02/21/gordon-browns-involvement-in-the-sale-of-the-land-to-ukcrmi/).   Here is an example extract from a Treasury document  dated 1 August 2007:

The PM is also most recently stated that he is very keen to make sure that Government departments are properly coordinated on this project [the laboratory] and that if there is a consensus that this is indeed an exciting project then we do what we can to make it happen. This is extremely helpful from a DIUS and MRC perspective, but, formally a NIMR relocation project in London has yet to receive Lyons approval from Treasury (for either the first planned NTH site or the possible BL site).

This was before the initial bidding process was closed.  The process was a sham, the other bidders having bid with no prospect of success. Brown should not have interfered at all,  even to say whether he thought X or Y was or was not  a promising project, but here he is  issuing a direct instruction to favour the laboratory consortium by getting all the government departments with some future or immediate interest in the laboratory to put their weight behind it. (When a Prime Minister says he is “very keen” on something that is an order to move heaven and earth to achieve it).

As with the Camden contract for kitchens and bathrooms I was unable to get any politician, local or national, to take up the matter. Every Camden councillor and the local Labour MP Frank Dobson  had the information but refused to act. Camden granted planning permission in principle, but this had to be agreed by Boris Johnson in his role of Mayor of London because the Institute building  is over the height which can  be sanctioned by a London council. Johnson  granted permission despite having the details of the corrupted bidding process (http://ukcmri.wordpress.com/2011/01/14/notification-of-planning-irregularities-to-boris-johnson/) and refused to comment on Brown’s illegal involvement in the decision.  Equally telling in this case was the failure of the national media to take up the story despite Gordon  Brown’s involvement.  The nearest I came to getting the story up and running in the media was a single  short piece in the London Evening Standard (http://www.standard.co.uk/news/no-10-interfered-to-push-through-600m-plan-for-virus-superlab-6557759.html).

The nature of public  fraud

Much, probably the large majority,  of the fraud consists of inflating contracts. This can be done with or without the collusion of public servants and politicians. Collusion between  contractors, public servants and politicians  speaks for itself.  Fraud without public servants or politicians being involved is more complicated. It requires a conspiracy by a number of contractors to fix a bidding process.  The larger the contract  or the more specialised the  work to be done, the more likely a bidding process can be fixed, because often there are only a handful of bidders  capable of taking the contract on. This leads to corrupt agreements between the companies to share out public contracts between themselves at inflated prices. This is done by the bidders  putting in bids to a supposedly competitive bidding process structured so that the company who is to take the contract puts in the lowest priced bid. However, this lowest bid is much higher than it  should be if it was pitched simply at a level to  guarantee a level of quality and provide a reasonable profit for the successful bidder.

The practice is probably very widespread. The Office of Fair Trading concluded an investigation in 2009 which showed widespread fixing of prices: “The OFT has imposed fines totalling £129.2 million on 103 construction firms in England which it has found had colluded with competitors on building contracts.” (see   http://www.oft.gov.uk/shared_oft/reports/Evaluating-OFTs-work/oft1240.pdf and http://www.oft.gov.uk/shared_oft/business_leaflets/general/table-of-infringements.pdf).

Where public servants and/or politicians agree to accept an overpriced contract they may be  bribed either directly or indirectly. A favourite indirect method  is not to pay the politician or public servant at  the time of the fraud but later with lucrative sinecures after they have left office .

The current rules regarding ministers and public servants taking posts in private industry are so lax as to be next to meaningless – they can take up posts after a year or two, regardless of how closely the private sector job is linked to their previous post.  A recent eye-catching example was that of Dave Hartnett who has just taken up a post with the accountants Deloittes. . The Telegraph Daily telegraph  recently reported “Until last year, Mr Hartnett headed operations at HM Revenue and Customs. His new role will involve him working one day a week at Deloitte, which acts as auditor for companies – including Starbucks – which have been accused of using legal loopholes to avoid paying tax.” (http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10083254/Former-Revenue-boss-lands-tax-advice-job-at-Deloitte.html). I am not  suggesting there is corruption  in this case,  but is it really acceptable to have such a senior and important public servant turning from  gamekeeper  to poacher so rapidly?  Like Caesar’s wife, politicians and public servants should be above suspicion.

Waste through incompetence and lack of alternatives

Some of the fraud will be accomplished because the public servant or politicians involved in making contract decisions are simply not up to the job of judging what is a reasonable price for the work being put out to contract.  This is a common enough state of affairs because public servants often find themselves asked to negotiate contracts  even though they  have no experience of  doing so because work which has always been done by direct public labour is suddenly subcontracted to the private sector.   To cover their ignorance the public servant  will often judge bids not on their objective merits, but on who is the cheapest within the criteria set for a contract.  Whether the bid is a reasonable price  for the work done is ignored. This has a knock on effect, not least because  of the widespread lack of honest competition in bidding.  Those accepting bids will justify their acceptance by referring to other contracts for similar work.  Because of this inflated prices become the norm. The politicians who have to make the final decisions on the contracts are as ignorant as the  public servants who negotiate the contracts and simply take what is put before them in the vast majority of cases.

But even where politicians or public servants do realise a price is too high, they can be in a very difficult position which makes them  accept the price quoted.  The problem is that if they refuse all the bidders for a contract on the grounds of cost , then how is the work to be done?  They cannot go elsewhere often enough because there is no public organisation which could do the job rather than a private company or not-for-profit  institution. This is a particular danger with really large or specialised contracts which can only be undertaken by a few companies.  An inflated price may have to be paid by the taxpayer because there is no longer a  public sector alternative.

How much money is being lost?

Total UK Government expenditure for 2014 is £715.3 billion (http://www.ukpublicspending.co.uk/total_spending_2014UKbn). However, that does not include all of the Public Private Initiative (PFI)  liabilities because  Governments want to keep the full  PFI/PPP indebtedness off  the official national debt.  A report by the Office for Budget Responsibility in August 2011 notes that many PFI deals are not recognised in the National Accounts.:

“ As well as lacking transparency, this has fuelled a perception that PFI has been used as a way to hold down official estimates of public sector indebtedness for a given amount of overall capital spending, rather than to achieve value for money.[27]

The report details the scale of the problem noting that “at March 2010, PSND [Public Sector Net Debt] included about £5.1 billion (0.4 percent of GDP) in respect of PFI deals that were recorded as on balance sheet in the National Accounts.” However the OBR considered that “the total capital liability of on and off balance sheet PFI contracts was closer to £40 billion (2.9 per cent of GDP).”[28] They estimate therefore that if PFI contracts were all recognised as debt in the National Accounts this would increase the level of debt by around 2.5% of GDP.[29]” (http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/114605.htm)

In 2012 The Guardian using ONS figures put total PFI liabilities at £301,343,154,097 (http://www.guardian.co.uk/news/datablog/2012/jul/05/pfi-contracts-list).

It is clear that  a substantial figure should be added to  the headline £715.3 billion to account for the full PFI liability for 2014.

In the nature of things it is impossible to say exactly how much of taxpayers’ money will have been spent on overpriced contracts. However, the examples which are public knowledge suggest that it must be very considerable, because so much of what used to be done in-house by the British state, at both national and local level, is now put out to contract.

Take the NHS as an example.  If you spend time as an in-patient in the present day NHS you are likely to find that the cleaning, laundry, catering and provision of multimedia installations are  contracted out. The NHS will also spend immense amounts on equipment which will be supplied by a private contractor. Staff will often be recruited by a private agency for a hospital.  If they need temporary doctors and nurses they will pay a private agency.   The hospital may well have a Starbucks or a Costa Coffee instead of an in-house café for visitors. There is fair chance  that  hospital car park will  be run by a private company. Most expensively, if the hospital is recently built it will almost certainly be the  subject  of a PFI contract which stretches way into the future (twenty years or more). This,  and apart from costing the hospital a good deal of money  to pay for the building,   will almost certainly entail a costly management contract to run and maintain the building. This means in practice no one will be in definite overall charge,  because if something goes wrong with the building the contractor has to be left to undertake the maintenance as they see fit

The NHS is one of the most comprehensive examples of contracting out. But most government departments and much of local government displays the same tendency.  Schools and universities are within the contracting out net.  Defence procurement is  depends  very largely on  private contractors, foreign and British.  Police forces around the country  have either privatised much of their administration or are thinking of doing so.  Even the translation service used by the courts has been put out to a private contractor (with disastrous consequences).  Local government services such as waste  collection and disposal and street cleaning are frequently in the hands of contractors. The most disturbing and absurd example I have come across is the privatising of the quasi-judicial  District Auditor post which oversees local government and deals with complaints about their financial probity(“ Following the outsourcing of the Commission’s in-house Audit Practice, all auditor appointments are of private firms “ http://www.audit-commission.gov.uk/audit-regime/appointing-auditors/).

If only ten per cent  official Government expenditure is creamed off by fraud, that would mean £71 billion  of taxpayers’ money will be lost this financial year.  That is more than half the current government deficit.  But the figure  could well be much more because of the omitted PFI costs and the incentive of contractors to be as greedy as they can get away with.  Putting on twenty or thirty per cent to charges for supplying goods and services to central and local government might seem reasonable if you are the supplier and have good reason to believe  prices are likely to be accepted even if they are high. If the Telegraph reports of the grossly inflated prices charged  through collusion by pharmacists and drug companies are to be believed, the sky is the limit in the right circumstances for ramping up prices.

 Why do politicians do nothing?

It is little wonder that politicians in Britain are so willing to tolerate corruption because so many of them are happy to have their snouts in the public trough themselves in illegitimate ways. The information published by the Daily Telegraph on MPs expenses in 2009 was sufficient to show that the majority of MPs were engaging in expense claims which should never have been counted as legitimate expenses by Her Majesty’s Revenue and Customs (HMRC) in normal circumstances . This was because they did not meet the HMRC test of being  expenses “ wholly, exclusively and necessarily “ incurred in the performance of a job.   Very few MPs faced criminal charges even though quite a few repaid money they had claimed. Nor does the public know how many of the MPs faced fresh assessments  by HMRC or the penalties if any HMRC imposed.

Two criminal offences are committed by those who evade tax by illegitimately describing expenditure they have incurred as tax deductible expenses. That  counts as a false declaration. They are effectively claiming money by false pretences. A second criminal offence arises if the bogus expense claim is made without an employer knowing that it is bogus (effectively theft from the employer) or a business which  is paying a sub-contractor expenses as part of the contractual arrangement  and the business does not know the claim is bogus (effectively theft from the employing business).

Depressingly, MPs appear to have learned little if anything from the Telegraph’s 2009 exposure of their shameful behaviour  because they are still thrashing their expenses (15 May 2013  http://www.telegraph.co.uk/news/newstopics/mps-expenses/10059243/Have-MPs-learnt-a-thing-since-2009-Their-greed-suggests-not.html).

There is also the widespread  practice of politicians being employed on lucrative contracts by organisations whose interests they have either surreptitiously  promoted as a backbencher or , in the case of ministers,  had an area of responsibility which coincided with that of the organisation giving them the job  (http://www.dailymail.co.uk/news/article-1387791/Corruption-risk-ex-ministers-walking-straight-private-sector-jobs.html)

Finally there is  the scandal of still active politicians openly acting as paid lobbyists,   including providing ready access to Parliament  (http://www.guardian.co.uk/politics/2013/apr/10/lobbying-professionals-parliamentary-passes).

How things used to be

Until fairly recently the British Civil Service was remarkably free from corruption (local government is a different matter), a fact made all the more surprising because of the truly colossal amount of money Government  disposes of each year . There were two reasons for this. The first was the hard-won tradition of public service which in which the Civil Service is an apolitical institution and as such serves no political ideology or party but provides politicians of all stamps with disinterested advice and executes their policies. This tradition has been underpinned by the lifelong working careers which public servants, especially senior ones, have commonly had. Of course, that was merely the ideal and, as with any human institution, the reality fell some way short of the ideal. Nonetheless, such sentiments and conventions have in the past affected the behaviour of public servants for the better, especially in the area of honesty. Sadly, the public service ethos has been largely lost because of the constant upheaval in terms of employment, the loss of  career security  and thirty years of politicians and much of the mainstream media reciting the false mantra that private is good, public is bad.

The second reason for a lack of corruption was  the direct provision of most the services provided by central government. This meant that the number of large central government contracts offered to private business  was  small in relation to the money spent on the direct provision of public service in all its aspects. In such circumstances serious fraud becomes difficult going on impossible for most civil servants because they do not have access to large amounts of taxpayers’ money. (Where they do have access, for example in the Inland Revenue, in most instances there are strict accounting procedures which make the embezzlement of large amounts of cash extremely difficult). Moreover, where there are few government  contracts, most civil servants are not in a position where someone  would find it fruitful to bribe them because they have nothing to sell.  Unsurprisingly, where serious corruption amongst public servants employed by central government has occurred in the past, it has been overwhelmingly in those areas where large government contracts exist, most notably in Defence Procurement and building contracts. It is a reasonable assumption that the more public contracts offered to private companies, the greater the corruption will be simply because the opportunity for corruption increases.

It would be impossible to reinstate the public service ethos quickly, but taking work back into the  public  service fold  would have an effect on fraud and waste through incompetence.  It would  definitely reduce fraud and should allow costs to be controlled because it would be the public sector setting the prices for the work.

Here is a question for the supporters of privatisation in it various forms to puzzle over. Ever since Thatcher began the privatisation of public services governments have insisted that this was saving the public money.  Yet  government expenditure since 1980 has risen substantially  in real  terms.  In 1980 total public spending was £104 billion (http://www.ukpublicspending.co.uk/total_spending_1980UKbn). Using the Bank of England inflation calculator, £104 billion at 2012 values would be only £377 billion. (http://www.bankofengland.co.uk/education/Pages/inflation/calculator/flash/default.aspx).

The cruel truth is that the £715 billion of  government expenditure  in the present financial year is almost double what it would be if the UK had maintained public expenditure at 1980 levels in terms of the real value of the Pound.  If the true PFI/PPP figure for 2014 was included it might be double. The huge increase since 1980  is very interesting because in 1980 the UK  not only had a serious unemployment problem,  but owned vast swathes of British industry, everything from British Leyland and coal mining to the public utilities and , believe it or not younger readers, a national bus network which meant that to live in the country did not mean you had to run a car.  1980s  UK also had armed forces which were considerably larger  than they are now and the putting out to private contractors of public sector work in  national government and council services was rare except in areas such as road building and defence procurement.  For example, local councils only routinely  employed direct labour on items such as road maintenance and cleaning.    In addition much of  private business then was, we were constantly told,  supposedly hideously uncompetitive . Yet despite  these alleged  crippling disadvantages, the British government in 1980  was able to maintain a level of public services  better and more comprehensive than that we have today whilst spending, in real terms,  little more than half of what government spends today.

Why has British government spending rocketed?  It is reasonable to put forward as the primary culprit the mania for privatising everything  because of the near doubling of government expenditure since 1980, the high cost of privatised services  and the many individual examples of public contracts, especially the PFI contracts, which seem outlandishly expensive.

 

These things have not been understood by the privatisers:

1. The public service ethos did exist and was most valuable in maintaining standards, continuity and honesty within public provision.

2. Multiplying the opportunities for fraud results inevitably results in more fraud.

3.  That public services cannot be run on commercial lines  because public provision is normally universal provision.  Unlike a private company losing business, a public service provider such as the NHS cannot turn round and say we will not treat these patients because we need to cut costs.

4. For public services to run properly need to be focused not on the bottom line but the provision of the service.

5. Once a public service has been contracted out to a private provider,  the private provider has the government over a barrel because there is no alternative to a private provider once the public service option has been done away with.

6. That public employment gave those so employed secure lives and indirectly increased the sense of  security in those employed by outside of  public service  because  having a substantial proportion in secure jobs in itself made society more stable and certain.

7. That public money is a recycling of money and however it is recycled it has a value because its spending supports local economies.

8.   That public expenditure has increased steadily during the privatising of public service activities.

Robert Henderson 30 6 2013