Tag Archives: welfare

The Great Charity Scam

Most people when faced with the word charity attached to an institution are inclined to be well disposed to the organisation regardless of what the charity is supposed to do.  If it is a popular area of work, such as medical research or the provision of services to disabled children, rationality goes out of the window.  Hardly anyone questions how the money is spent or how much of it actually goes to the people the charity are supposedly helping. Even fewer ask where charities get their money from, the public commonly  subscribing to the  benign but erroneous assumption that it is collected largely from money put into collecting boxes or donations made by the living or the dead directly to charities. There is a further commonly believed  fantasy that those collecting for charities are  unpaid volunteers cheerfully giving their time out of  pure altruism, a fantasy which quite incredibly often extends to  that  persistent nuisance known as  “chuggers”  who aggressively buttonhole  people in the street.

The truth is a great deal more complex and murkier than the general public imagines.  The most dramatic subversion of charities comes in the form of national and local governments directing taxpayers’ money to charities to perform work which would otherwise be undertaken either directly by the public body or through the employment of a private enterprise contractor.  The charities who accept  public money – and the vast majority of the larger ones do – become no more than subcontractors  to  government.

The extent of  public funding is massive:  In 2010 the Charities Commission (which oversees charities in England and Wales) concluded  “that almost a quarter of the large charities consider public sector funding to be their most important source of income. (http://www.independent.co.uk/news/uk/politics/government-cutbacks-could-wipe-out-25-per-cent-of-charities-1926155.html). In February 2010 ‘ Cardiff University’s school of social sciences on behalf of the public services union Unison predicted that many charities will go bust” [because of coalition cuts in funding]’ and concluded  that ‘More than half of charities’ income now comes from government contracts to deliver public services.’  (ibid).

The use of charities to provide public services  fits in with the Coalition Government’s  drive to subcontract public provision. This means that all three major British political parties officially support the use of charities as government subcontractors, albeit  half-heartedly by the LibDems. Whoever is in power for the foreseeable future, it is a fair bet that the relationship between charities and the Government will broaden and deepen.

As for fundraising from the public, “chuggers”  are paid, a basic and sometimes  bonuses.   They work for fundraising firms who receive payments from a charity for every recruited donor. (http://www.pfra.org.uk/face-to-face_fundraising/do_you_object_to_chuggers/they_are_paid/).  Many of the larger charities run regular raffles. My experience of these is that once a raffle a raffle has been entered  they will not only send  details of all future raffles but in many cases send out second letters urging entry into the raffle if an entry has not been received a few weeks before the closing date. I  have also been positively bombarded with requests, both by letter and email, for  donations not only from charities to which  I have donated , but also from  charities to  which I have never contributed .   This can only mean charities sell on donors details to other charities and quite probably to private business.

The other prime problem with  charities, even large ones, is the fact that they are often very inefficient. The poorly run ones spend a great deal on administration.  They spend inordinate  amounts  on advertising. They hoard money rather than spend it. They manage their money poorly. They fail to modernise their services. Their accounts are inadequate. The idea that charities will be more efficient than direct public provision  is simply laughable. Not only do they suffer from the structural ills of public service they lack any proper  public accountability. Charities are audited each year, but that audit is much less demanding than the audit required of large public companies. Moreover, their frequent failure to keep adequate records makes  any audit of the use of public money very difficult. It would also be a very  expensive job to monitor their spending of public  money meaningfully.

Take the case of Scope, the charity previously known as the Spastics Society, which aids those with cerebral palsy.  It is a mainstream charity of just the sort to attract public sympathy in large measure. The first thing to note is that it changed its name in 1994 from something everyone could immediately understand – the Spastics Society- to something which most people would not have a clue about. The charity had allowed itself to be seduced by the marketing sirens.  It is difficult to imagine this confusion did not have some effect on fundraising.

In January 2006 Scope announced it was shutting 50 of its shops because it had a predicted £310 million deficit. (Daily Telegraph 13/01/2006). The Telegraph account went on to disclose that Scope’s last accounts showed that it was budgeting to spend £35.6 million more than it received in the financial year 2006/7, that there was a hole in its pension fund and that its buildings suffer widespread dilapidation through lack of investment.  I think most people who think about it would be somewhat disturbed by the idea that a charity had a pension fund of any size and that a substantial part of their donations are going to fund it. Charities in the public mind are thought of as institutions where people offer their services either free or at a discounted rate. The idea that their paid employees are just like any other employee does not fit comfortably with the public’s idea of charity.

One of the directors of Scope Jan Hildreth at that time  (he was also a former director-general of the Institute of Directors summed up the mentality of his and many other charities: “Like many charities, the concern of the society has always been its activity and not its finances.”(http://www.telegraph.co.uk/news/uknews/1507717/Scope-to-close-50-charity-shops-as-10m-loss-looms.html). Interestingly  Scope blamed part of its plight on ‘the Government for underfunding services it provides, such as residential and school places.  “It wants our services, but it doesn’t want to pay for them,” the spokesman said. “This is a drain on our coffers.” ‘ (ibid).

To inefficiency add fraud. The National Fraud Authority estimates  internal and external fraud against the charities costs £1.3 billion a year ( http://www.charity-commission.gov.uk/about_us/contacting_us/p_brief_charities_fraud.aspx).

The use of charities as government sub-contractors has other pernicious effects. It allows a government to evade responsibility even more effectively than the employment of private companies does because charities, especially popular ones,  throw up a moral shield. As mentioned above people feel that money spent by a charity is a good in itself. That applies even when it is taxpayers’ money.

Often the public is not even aware that public money has gone to a charity. This means that governments can support unpopular policies, such as those associated with political correctness, without the general public being aware that public money is being used to promote the policies. A  government can also make charitable donation part of their PR because they can  gain kudos from the public by publicising their donations of taxpayers’ money to popular charities.

As the Scope complaint quoted above suggests, governments may also see  charities as a cheap means of public provision. Whether it is or not is another matter – personally I would doubt it because of the widespread incompetence in the charity world.. There is a further objection to the use of charities as publicly funded providers. They have a moral and civic role. The whole point of a charity is that it is the product of the individual will, a conglomeration of the active decisions of those who choose to make a contribution.  It is part of what academics like to call civil society, those institutions which men naturally form in a free society and which fall outside the ambit of the state. Lose or even seriously diminish those institutions and the state determines all, for there is nothing to oppose it or offer an alternative.

Making a charity simply or largely a client of government undermines the very idea of charity. There is every chance that if charities are seen as arms of government, private donations to them will begin to dry up. That in turn would have spending implications for the taxpayer, because although often inefficient,  charities do fund a considerable amount of what would therwise be described as public provision. The taxpayer would end up footing the bill for extra public provision.

State funding also makes charities forget their original role. The  natural tendency for charities who become heavily dependent on public money is to  cease to view their organisation as a charity and see it simply as a business.  There was a good example in the news this week.  The St John’s Ambulance (SJA), a charity which provides medical services at most major public event in Britain and which is much admired by the public has decided to “rationalise” the charity by moving from a system of localism with money raised in an area being spent there to a centralised  treasury which will collect all the money raised throughout the UK  and distribute it as their  central management sees fit.  The volunteers fear that the change will make people less willing to volunteer for unpaid work.  As the SJA has 1,600 paid staff and 40,000 volunteers, the effect  of the change could be dramatic.  (http://www.telegraph.co.uk/health/healthnews/8684165/St-John-Ambulance-abandoning-volunteers-over-restructure-project.html).

The SJA also displays another unpretty trait of modern charities; the expansion of highly paid posts. The proposed SJA  reform will involve  the creation of “ eight regional directors will be created on salaries of £80,000 a year plus benefits to represent London, the south east, south west, East Midlands, West Midlands, East of England, North-West and North East.”  (Ibid).  Salaries exceeding £100.000 for chief executives are common (http://society.guardian.co.uk/salarysurvey/table/0,12406,1042677,00.html).  Sometimes the percentage of donations taken by senior staff is astonishing. Take PACT, a charity run by the wife of Sir Anthony Meyer, with Cherie Blair – a close friend of Lady Meyer – as patron. Here is the Mandrake column in the Telegraph reporting on 25 May 2011 “… all but £9,500 of the money received in donations by Pact, which stands for Parents & Abducted Children Together, was paid to the Chanel-clad Catherine Meyer, who is the chief executive, and to one member of staff.

“Lady Meyer, who is also its president, and her employee were paid a total of £49,586. Lady Meyer received almost 70 per cent of that sum. Pact’s income from donations was £59,056 and it received a further £38,234 in grants…

“We are doing a huge amount of work for very little salary,” she said. “I used to work in the City and earned much more.”

Her husband, and six of Pact’s 11 trustees, added in a letter: “We consider it to be at the low end of the pay scale for chief
executives of charities with a demanding brief. “(http://www.telegraph.co.uk/news/celebritynews/8534133/Cherie-Blair-is-in-no-hurry-to-speak-up-for-charity-boss-Lady-Meyer.html).
The example beautifully demonstrates the inability of those running charities to understand the difference between a business and a charity.

The danger for charities which lose their popular base and become dangerously dependent on public  funding is that they  run the risk of being left stranded when the economic tide goes out.  When, as is happening today, public funding is cut many will find that they cannot fill the gap because they have put too many of their campaigning eggs in one basket.

There is a further serious  problem, namely what is a  legitimate charity? Charity is big business. According to the Charity Commission, as at June 2001 there were 161,978 registered charities in England and Wales with a combined income of £56 billion (http://www.charity-commission.gov.uk/About_us/About_charities/factfigures.aspx).   Is it
really possible that such a vast number of good causes exist which deserve the considerable privileges granted to them by the state?

Take our private schools (many of them bewilderingly for foreigners called public schools).  They are overwhelmingly charities. They also have in most cases a history of one hundred years or more. This means that the profit motive is absent and a quasi public-service (civil society) ethos has had time to evolve. Yet public schools – which get around £100 million tax relief – have always subsidised the education of the poorer middle-class children rather than the education of the truly poor. Why should they have status of a charity?

There are also many questionable cases where the charity exists to fund something which is essentially, even in principle,  a private or sectional interest, for example the Royal Society for the Protection of Birds. Why should the taxpayer subsidise such institutions?

The biggest charitable status bone of contention is political action.  The Charities Commission permits political campaigning  “Yes – any charity can become involved in campaigning and in political activity which further or support its charitable purposes, unless its governing document prohibits it” but bans charities having a political purpose “A charity cannot have a political purpose. Nor can a charity undertake political activity that is not relevant to, and does not have a reasonable likelihood of, supporting the charity’s charitable purposes”  (http://www.charitycommission.gov.uk/publications/cc9.aspx#11).  This is completely impractical. For example, how can  a charity whose purpose is to support immigrants in applications for asylum, fight deportation and so forth not  have a political purpose?  There can also be the complication of  public funding which is a political matter in itself. Take the Immigration Advisory Service (IAS) which is currently insolvent,viz: .

” The Immigration Advisory Service (IAS), the largest provider of publically funded immigration and asylum legal advice,  advised today that it had been placed into administration. The IAS, a registered charity, has been in existence for 35 years, and employs 300 staff at 14 locations across England and Scotland. It is renowned for a large number of important legal precedent cases which have been taken through the Courts, including to the Court of Justice of the European Union and the European Court of Human Rights.

“The Governments reforms include the removal of immigration from the scope of legal aid, and a 10% cut in legal aid fees for refugees seeking asylum within the UK. Immigration accounts for around 60% of IAS’s income. There are few organisations that could cope with the compound effect of removal of immigration from the scope of legal aid and a cut in fees for asylum clients.

“The IAS has been in discussion with the Legal Services Commission (LSC) in an attempt to gain support for a solvent restructure of its operations. IAS had also tried to reach an agreement with LSC for an extended period to repay monies which (in common with many other firms) had been claimed in error, partly, in IAS’s view, due to the complex funding rules in place. The legal aid cuts put IAS in the position of needing to fund any repayment of these monies, from a much reduced income base, and as a result it has not proved possible to reach agreement on a way forward.” (http://www.iasuk.org/home.aspx).  How can that not be an organisation with a political purpose?

Charities epitomise the difficulties of mixing private and public. It is true that as non-profit making bodies they share some of the ethos of public service and the profit motive is absent, but their entanglement with government has utterly undermined their charitable status and moral stature.   How do we return them to  their proper purpose? Charitable status should only be granted to those who raise their own money. Paid fundraisers should be banned.  Limits should be put on the amounts spent on administration and advertising.  Charities should only be registered which undertake their entire work in the UK. Those currently registered which are inherently political should have their charitable status removed.  Only  those with a purpose which could potentially benefit anyone should be registered.  Examples would be those dealing with medical research or care of the old.

Impractical? A recipe for chaos? No. Much of what charities now do is what government should be doing. Governments would have to do their duty and either employ what are now charities as simple  subcontractors without charitable status or make other arrangements. A great deal of the rest is simple political action under the guise of charity or the subsidy of of particular  interests without any wider social benefit.  Some charities such as the IAS are directly opposed to the UK’s interests.  A radical review is required of what should constitute  a charity.

Robotics and the real (sorry, Karl, you got it wrong) final crisis of capitalism

Robert Henderson

Humans and Robots

Robotics is advancing rapidly. Probably within the lifetime of most people now living – and conceivably within the next ten years – there will be general purpose robots (GPRs) capable of doing the vast majority of the work now undertaken by human beings. When that happens international free trade and free market economics even within a closed domestic market will become untenable.  The final crisis of capitalism will be the development of technology so advanced that it makes capitalism in the Marxist sense impossible because machines make humans redundant.

Robots are already undertaking  surprisingly sophisticated work, but almost all are designed to undertake a limited range of tasks(http://www.sciencedaily.com/news/computers_math/robotics/). None is a true GPR. That makes them expensive because of the limited nature of their possible uses and the restricted production runs they can generate. Many of the most sophisticated are either one–offs or counted in single figures. (http://www.telegraph.co.uk/science/space/8330246/Japanese-robot-could-be-sent-to-Space-Station.html).   A GPR will change that. They will be able to work across a wide range of tasks which will both enhance their utility and result in massive production runs. GPRs will become cheap, much cheaper than human labour.

The cost of GPRs will also fall because GPRs will sooner or later reach a stage where they can replicate one another or design and build new types of robot.  This is potentially startling in terms of what might be produced. Let us say that it takes one week for one GPR to create another. At the end of the first week you have two GPRs. At the end of the second week you have four GPRs. Let us suppose you keep on doubling up every week. In thirty three weeks you have more GPRs that the entire present population of the world. In thirty four weeks you have more than twice the population of the world. The only restrictions on production would be government curbs or a shortage of materials and energy to build and run them.

Economic history to date shows that technological advance creates new work. It may have very painful consequences for individuals whose livelihood disappears – the hand-loomweavers of the early industrial revolution are a classic example – but new opportunities for employment arise as an economy becomes more sophisticated and variegated. The hand-loom weaver found work in the new factories; the redundant western factory worker of today in a call centre. At worst they might only get a MacJob but at least it was a job.

But if the GPRs can do the MacJobs as well as the more demanding work, then there will not be any new jobs for humans, not even much supervisory work because GPRs will need little supervising, and less and less as they become ever more sophisticated. Hence, this technological advance will be like no other. GPRs will not only take away existing jobs, they will devour any new work; the easier work first, then the more complex.

The normal human response to such ideas is not reasonable scepticism, but rejection based on a refusal to accept the reality of change, a rejection expressed with ridicule along the lines of the Victorians’ response to the car:  “It will never replace the horse”. Mention robots and people commonly scoff “Science Fiction” to get rid of the matter without further debate. This type of response is natural enough because human beings, apart from disliking change, do not like to think of themselves as dispensable or redundant. Moreover, incessant propagandising by western elites has made it a received opinion of the age that work is becoming ever more demanding and requires an increasingly educated and knowledgeable workforce, something which seems to most humans to make them uniquely capable of doing the jobs of the future and, by implication, this excludes mechanisation (and robots) from the majority of future human employments.

If that were true the dominion of GPRs might be at least delayed. Unfortunately, the reality is that the large majority of modern jobs, in both the developed and developing world, are non-skilled or low skilled. Just sit and ponder how many our jobs need a great deal of intelligence or knowledge. Think of the huge numbers who are employed in call centres, shops, cafes, cleaning, driving car, on farms picking fruit and vegetables or assembling items on production lines which require no more than a repetitive task to be performed. These may be hard work but the training or innate skill required is small. Even work whose nature suggests that it is more demanding of education, training and knowledge such as much clerical work can be readily done by anyone with a reasonable facility with the 3Rs and a familiarity with basic computer operations, such as using a word processor and a search engine, something which the large majority of those in Western labour markets at least should possess. If twenty per cent of jobs in a developed country require an above average IQ or a long period of specialised training I should be surprised. In places such as India and China it will be less as they have taken on much of the repetitive factory production of the advanced world and are less inclined to substitute machines for labour, which is still by western standards very cheap.

The overproduction of graduates in both the developed and developing world is a strong indicator of the predominance of simple jobs.  In Britain there is a target of getting 50% of school-leavers to university. At present that does not look like being achieved because the figure has been stuck around 40% for years and the recent massive increase in university fees for UK students is likely to cause even that figure to drop in the future. But even with 40%, experience shows that is far too high a figure because large numbers of graduates are either unemployed or employed in jobs which do not require a degree-level education. The latest Office of National Statistics figures show 20% of recent UK graduates are without jobs, but even before the present  recession began in 2008, graduate unemployment was twice the UK unemployment average at 10.6%  (http://www.statistics.gov.uk/cci/nugget.asp?id=1162). The  figures are worse than they look because graduates in employment include those in jobs for which a degree is unnecessary. In 2010 one in three new graduates were forced to take menial work  (http://www.thisismoney.co.uk/money/article-1697466/Stop-gap-graduates-forced-into-menial-work.html).

The picture is similar elsewhere. In China there are more than six million unemployed graduates (http://www.businessweek.com/magazine/content/10_37/b4194008546907.htm); the USA  had 2.4 million unemployed graduates unemployed as of June 2010  (http://www.usatoday.com/money/economy/employment/2010-12-06-collegegrads06_ST_N.htm) and the Eurozone generally experiences a high level of graduate unemployment  (http://www.barcelonareporter.com/index.php?/comments/graduate_unemployment_rate_one_of_eus_highest/).  The position in less developed countries is considerably worse because the number of graduate-level jobs is meagre and often only available in government funded positions.

Employability also varies according to education below degree level.  Take the country which started the so-called “Arab Spring” uprisings, Egypt, as an example. In 2011 Egyptian high-school graduates accounted for “42% of the workforce, but 80% of the unemployed.” (http://www.afripol.org/afripol/item/237-africa-middle-east-the-jobless-graduate-time-bomb.html?tmpl=component&print=1). Most startling, a 2007 report found that the rate of unemployment in Egypt is ten times higher in the educated section of the population than among illiterates. There education equals disadvantage.  (,http://www.huliq.com/29092/unemployment-in-egypt-highest-among-literate-population).

The hard truth is that most modern work requires less knowledge and skill than was required in the past. A peasant four hundred years ago had to know about his soil, his plants and animals, the seasons, the weather, where natural water was and be able to do a hundred and one practical things such as ploughing, sowing, harvesting, making and repairing of fences and ditches, using tools and turning out cheese and cream and dried meat and vegetables How many jobs today require a tenth of that volume of knowledge? Nor did more demanding work stop at peasants. A 17th century craftsman would have served a long apprenticeship. Jobs which did not require an apprenticeship would have probably required some manual skill. Those who aspired to intellectual employment had to laboriously write and amend their works rather than enjoying the immense convenience of a word processor. That and the cost of writing materials forced them to become precise in a way that virtually no one is today. Perhaps most importantly,  modern division of labour with one person doing a repetitive job was not king. A person making something four centuries ago would probably make the entire item and quite often a variety of items, for example, a 17th century blacksmith would not merely shoe horses but make a wide range of iron goods.

GPRs would arguably have much more immediate difficulty in displacing human labour in a sophisticated pre-industrial society such as England in 1600 than they would today, because of the more complex demands made by 17th century employments. The large majority of  English people in 1600 were employed on the land where subjective judgement rather than decisions made on objective facts were pre-eminent in the days before science and advanced technology entered farming. A very sophisticated GPR would be needed to make such judgements. (I am assuming that GPRs sent to England in 1600 would only have the knowledge available in 1600). Conversely, GPRs today could take over a great deal of employment in Western economies and much of the industrialised parts of the developing world, especially China, because there are so many simple jobs which would be within the capabilities of very basic GPRs.

But that is only half of the story. If most jobs are not demanding of much by way of learned skills and even less of intellect, they do need diligence. Human beings are generally more than a little reluctant to put themselves out in work which has no intrinsic interest for them or which is not very highly paid.. Most people do not have a vocation, or at least not one at which they can make a living. Left with  work which is seen as simply a livelihood, most  just want to do enough to live what they think is a comfortable life. If the job they are doing is laborious and boring and pays not a lot more than is needed to feed and clothe and house them, then it’s a certainty that they will be more than a little resentful. (An old Soviet joke about low wages ran that the communist government pretended to pay the workers and they pretended to work). Resentful equals careless equals idle equals dishonest equals loss of custom equals loss of profit. So what will an employer do when he can employ a robot instead? He will go and gets himself some GPRs which will not get awkward, do what they are told, keep working all the time without being watched, does not make regular mistakes and requires no wages or social security taxes or holidays or sick leave. And it will not be able to sue you for being a bad employer.

The GPRs will have all the capabilities of computers. They will be able to compute and model and display and manipulate data to your heart’s content. They will absorb unlimited amounts of data in the blink of an eye. You need a GPR to speak French, the GPR will speak or translate French. If you want a GPR to explain quantum mechanics, the GPR will produce a lecture by an eminent physicist. You need to fix your car, the GPR will fix your car.

Now, how could any human being compete with that? At that level they could not, but in the beginning at least there will still be a sizeable chunk of jobs which GPRs will not be able to do. These will be the jobs which cannot be reduced to quantifiable tasks; jobs which cannot be done by following an algorithm; jobs which require judgement and jobs which require motivation to achieve a complex end which is not obvious from the units of means which are required to achieve it.  But those type of jobs are only a minority of jobs, probably a small minority, perhaps 20% of the total. If the earliest GPRs could only undertake fifty per cent of the jobs which humans do that would be catastrophic. Human beings will not be able to kid themselves for long that everything is going to be all right.

There will be two further advantages enjoyed by GPRs over humans. In principle there are no limits to increases in the capabilities of GPRs; there is no such human potential in the present state of knowledge. It may be possible in the future to enhance human capabilities dramatically through genetic engineering or a marriage of human and machine to produce a cybernetic means of advancement, although in both cases the question would arise are such beings human? But for the foreseeable future there is nothing to suggest that human capacity can be raised dramatically through education and training, not least because attempts to raise IQ substantially and permanently through enhanced environments have a record of unadulterated failure over the past fifty years or more. Most tellingly, all the claims for raised IQs through enhanced environments involve people without well above average IQs. No one has claimed to have demonstrated that those with IQs of over 150 can have their IQs raised by environmental means. Nor do adult IQs increase as people experience more and learn more. That suggests humans have reached an intellectual plateau in terms of an ability to comprehend by the middle teens. With GPRs as many robots as were wanted of a certain ability uld be created.

The second advantage is that GPRs will come with a guarantee of performance. An employer gets what it says on the tin. Moreover, the performance will be consistent. Humans beings do not carry such a guarantee. The individual’s qualities only become apparent once on the job and are subject to variation according to the physical and mental wellbeing of the person.  This makes them a gamble for anyone who employs them. A faulty or rogue GPR could be repaired or replaced without moral qualms; sacking a human being raises all sorts of ethical questions and matters of sentiment.

The social and economic effects of GPRs  

When the first GPRs appear those in political authority will probably try to say everything will be all right when they are first presented with the problem. Now it might be thought that it would be pretty obvious that a GPR which could do everything the average human could do and then some would spell trouble for the human race, but it never does to underestimate the power of custom, ideology and the sheer unwillingness of human beings to face troubles which are not immediately upon them.  The tired old and worthless comparison with technological change in the past will doubtless be made, namely, that new jobs for humans will be generated by the GPRs. But that will not last long because the reality of the situation will very rapidly force elites to accept the entirely new circumstances.

There would be a dilemma for the makers and distributors of goods and services.. At first it might seem attractive to use GPRs, but as humans lose their employment and purchasing power the question for private business would be who exactly are we producing for? Very few would be the answer. For politicians the question would be how can we finance government including public services when our tax base has collapsed? The answer is we cannot as things stand.

As GPRs threaten to destroy the world’s economy, politicians will be faced with an excruciating dilemma. If GPRs are allowed free rein by governments the consequence will be a catastrophic collapse in demand as humans lose their employment en masse and an inability of the state as it is presently constituted to provide welfare to those put out of work or even to maintain the essential services of the minimalist state such as the police and army.

The situation will be pressing no matter how supposedly rich a country is because the majority of people even in the developed world are actually poor. They are only a few pay packets away from destitution (http://www.retirementsolutions.co.uk/many-britons-have-little-or-no-savings). Even those who own their own home will not be able to sell it because who will
there be to buy?

To begin with attempts will probably be made to control the crisis bureaucratically by instigating rationing and price controls. But that will not go to heart of the problem which is how do you sustain an economy in which most people are not working. In the end politicians will be faced with two choices: ban or at least seriously curb, the use of GPRs or adopt a largely non-market economy. Banning GPRs completely would create a particular problem because some countries would continue to use them and this could lead not merely to cheaper goods and services but technological leaps which exceeded anything humans could do. For example, suppose that a country produced GPRs to their fighting. A country which relied only on humans would be at a hopeless disadvantage.

The widespread banning of the use of GPRs in national territories would severely shrink international trade, because as sure as eggs are eggs not all countries would stop using GPRs  to produce items for export.  Any country using GPRs could undercut any country which banned GPRs. Protectionist barriers against countries using GPRs freely would have to be erected, although human nature being what it is, this would doubtless result in GPR products being supplied through a third country which had ostensibly banned GPR produced goods and services. The likely outcome of such a situation would be for protectionism to grow beyond the banning of GPR products to the banning of products simply because they were suspected to be GPR produced. This would also be a convenient excuse for simply banning imports.

As free trade (or more accurately freer trade) and internationalism generally has been the Holy Grail of politicians in the developed world for a generation or more, the re-embracing of protectionism and state control might seem to be a tremendous psychological blow for western political elites to accommodate.  In practice it is unlikely to give them any great emotional difficulty because elites only have one fixed principle, namely, to do what is necessary to preserve their position. Think how the British mainstream Left, most notably the Labour Party, happily embraced the idea of the market and globalism in the early 1990s after having been resolutely opposed to both only a few years before. Here is Blair in the late 1980s: “We will speak up for a country that knows the good sense of a public industry in public hands.” (The Blair Necessities p52 1988). Dearie me, who would have thought it?

The alternative to a protected economy in which GPRs are banned or severely restricted is a society in which the market is largely defunct. A perfectly rational and workable society could be created in which human beings stopped thinking they had to work to live and simply lived off the products and services the GPRs produced.  The GPRs would do the large majority of the work and the goods and services they provide would be given free to everyone whether or not they had formal employment. No GPRs would be allowed in private hands. Such a situation would mean the market would not make the choice of which goods and services were provided. Rather, the choice would be made by the consumer through an expression of what was needed or wanted before products were developed or supplied.  This could be done by anything from elected representatives to online voting by any member of a community for which goods and services should be supplied. For example, all available items could be voted from by the general population and those which were least popular dropped. The provision of proposed new lines or inventions could be similarly decided.

As for allocating who could have what in such a world, money could be issued equally to everyone in lieu of wages (a form of the social wage). Alternatively, in a more controlled society vouchers or rations cards could be issued equally to everyone for specific classes of goods. Greater flexibility could be built into the system by allowing the vouchers to be swopped between individuals, for example, a voucher for footwear swapped for food vouchers.

In such societies there would be scope for a limited use of private enterprise. People could be allowed to provide personal services, for example, entertainment, and produce goods just using human labour (human-made would gain the cachet that hand-made has now). There would also need to be some greater reward for those who occupied those jobs which still required a human to do them such as political representation, management and administration. The reward could either be material or public approbation. It would not be unreasonable to imagine that in a society where necessary work was at a premium quite a few would take on such positions for the kudos.    There could also be some legal requirement to undertake work when required.

The greatest change resulting from such a social upheaval would be the removal of most of the advantage the haves now enjoy over the have-nots. Because the vast majority of things would be provided by the state one way or another, the advantages of wealth would be greatly diminished. Those with wealth at the time the GRPs forced a change on society might still have their money, but what would they spend it on? Not the goods and services provided by society because they would be sufficient for any  individual? On the luxury goods and services offered by human-labour enterprises? Perhaps, but that would be a petty pleasure. What the rich would have lost is what they prize most, their power. They would not be able to hire other humans easily because why should anyone work as a servant when they already have the means to live? Instead they would have to live as “the little people do” (copyright Leona Helmsley). The historical experience of those with privilege relinquishing it peacefully is something of a desert, but in the circumstances of where no one has to work simply to live they would have little choice.

It would be difficult to build up a great fortune even where money remained the means of exchange, because all that would be permitted outside of socially controlled provision would be that which humans could produce without the aid of GPRs or perhaps without any form of robot, would be items which because of their means of production or provision would be expensive. This would make them luxury items. There would also be an incentive for most people not to buy them because the socially produced items would be much cheaper, in effect free because no work would have been done to earn the money to buy them. Money in such a society would have much of the quality of a voucher.

Perhaps some entertainers and artists might still command high incomes but fortunes made from business would be next to impossible. The vast fortunes made in banking and other financial service providers would not exist because financial services would become redundant in a society which has decided to provide the means of living without working for it. But like the rich generally, what would it really buy them?

Could an economic system akin to those which depended heavily on slaves not be created with GPRs taking the place of slaves which might be owned by anyone? The answer is negative. No slave society has ever relied overwhelmingly on slaves.  In slave societies there is always a good deal of free labour, both because of the scarcity and cost of slaves and the inability of owners to trust slaves to do all work or work without the supervision of free men and women. The demand created by the free part of the population through work or accumulated wealth provide the basis for a market economy in a slave-owning society. In many slave societies, slaves have acquired rights to earn money, own property and have families, all of which bolsters the demand of the free part of the population.  In the case of the GPRs, they would undertake so much of the work there would be insufficient realisable demand to sustain a market economy. There would be no point in private business using GPRs on a large scale because there would be no mass market to serve.

Who would be best placed to survive? 

It might be thought that the people best placed to survive would have been those in the least industrially developed states because they would be less dependent on machines. But the trouble is that there is scarcely a part of the world which had not been tied into the global economy. If a country does not manufacture products on a large scale, it exports food and raw materials and accepts Aid.

The fundamental trouble with Aid is not that it breaks the initiative of the recipient or props up dictators or alters traditional trading patterns or drains countries of money through everlasting interest, although all those are important features. . The killer fact is that it produces a level of population in the Third World which the Third World cannot naturally support. If the  economies of the industrial nations collapse, the Aid will stop and the market for their export of food and raw materials dry up. All of a sudden the Third World will find they cannot feed their populations and their elites will no longer have the means of maintaining order because they will not be able to finance forces to subdue and control the population.  The chaos which will ensue will be aggravated by the fact that the old economic and social relationships have been fractured so that even maintaining a population appropriate to the traditional ways of living will be problematic.

Low-wage developing countries such as China is now will be struck particularly hard because when GPRs are available their labour cost benefits will disappear.

The future

The rate at which robotics evolves will play a large part in how the story unfolds.  The speed with which GPRs replace human beings could be truly bewildering. The example of digital technology to date suggests that the stretch from a primitive GPR doing simple work which can be broken down into physical actions to a GPR with some sort of consciousness or a facsimile of what humans think of as consciousness will not be massive. Such development could well be speeded up by GPRs assisting with development as they attain more and more sophisticated abilities. The faster the development of  really sophisticated GPRs, the more chaos there is likely to be because there will be little time to plan and implement changes or for the human population to accommodate itself psychologically and sociologically to a radically different world

How sophisticated GPRs will get is unknowable, but the development of Artificial Intelligence programs which allow a process of learning are already well established. These have the potential not only to produce the wide-ranging intelligence which would allow value judgements, but also for GPRs to develop in ways which humans cannot predict. (http://www.telegraph.co.uk/technology/microsoft/8344028/Xbox-Kinect-foretells-computers-of-the-future.html).

It is reasonable to assume technology will develop until GPRs are showing behaviour which suggests consciousness. They will make decisions such as what would be the best way of  achieving ends which are loosely defined, for example, an instruction to design a city redevelopment in a way which would have the greatest utility for human beings. At that point the GPRs would be effectively making value judgements. Perhaps they already are doing that at some level. (http://www.telegraph.co.uk/science/roger-highfield/8587577/The-big-plan-to-build-a-brain.html).

This is a real danger with potentially catastrophic world-wide consequences. The problem is getting people in power to address the subject seriously. There needs to be discussion and  planning now about how far GPRs,  or indeed robots or any type,  should be allowed to displace human beings in the functioning of human societies. Nor should we assume humans will happily tolerate GPRs  for reasons other than the economic. Robots which are too like humans make humans uncomfortable, probably because it is difficult to view a machine which looks like a human and acts like a human simply as a machine.  (http://www.telegraph.co.uk/technology/8494633/Japanese-robot-twins-fail-to-bridge-the-uncanny-valley.html)

Apart from the economic consequences, GPRs also offer dangers such as the possibility of the realisation of the tyrant’s dream; an army of unlimited and utterly loyal and obedient servants who will refuse no command and GPRs developing intelligence and human-like qualities so profound humans have difficulty in treating them as slaves.  But those are subjects for another day…

If we leave the EU we mustn’t be another Norway

Amongst those who want the UK to leave the EU there are those who say “Look at Norway, we can have the same arrangement with the EU as they do, a simple free  trading agreement”.  This is profoundly wrong.  The European Economic Area (EEA)  countries  of which Norway is one have to take on most of the more obnoxious burdens of the EU  whilst being excluded from EU decision making . This is unsurprising because the EEA was born of a desire of the European Free Trade Area (EFTA) to integrate with the EU.

EFTA was founded in 1960. The founding members were Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom. Subsequently Finland became an associate member in 1961 (becoming a full member in 1986),  Iceland joined in 1970, Liechtenstein 1991 (previously its interests in EFTA had been represented by Switzerland).

EFTA gradually lost its members as they joined  what is now the EU.  The United Kingdom and Denmark joined the European Economic Community in 1973, Portugal joined  in 1986., Austria, Sweden and Finland joined the EU in 1995. This left only Switzerland, Norway, Iceland and Liechtenstein.

Negotiations between the EFTA nations and what was then the European Community  (EC) for a closer relationship came to fruition in 1992 when the  EEA Agreement was agreed by  negotiators of EFTA states and the EC members.  Switzerland rejected the agreement in a referendum,  but later signed bilateral treaties with the EU which have much the same effect as the EEA Agreement.  (http://eeas.europa.eu/delegations/switzerland/eu_switzerland/political_relations/index_de.htm )The rest of the EFTA members signed. The EEA Agreement came into force in 1994. The full text can be found at   http://www.efta.int/legal-texts.aspx  (click on the EEA link and open or download the PDF file).

EEA membership requires that subscribing states have to accept the “four  freedoms” of the EU: the free movement of goods, persons, services, and capital among the EEA countries as well as those comprising the EU.  This the prime reason for not joining the EEA or having a bilateral relationship with the EU similar to that of Switzerland.  These “ four freedoms” mean amongst other things that  EEA members cannot meaningfully control immigration, protect their economy, prevent foreign takeovers or  freely engage in any new taxpayer funded  subsidy  for  which is judged to interfere with the market (article 61).

The forced adoption of the “four freedoms”  is reason enough not to join the EEA or anything like it.  However, there are further sovereignty removal horrors. EEA members have to adopt EU law in the areas of social policy (article 67), consumer protection (article 73), environment (article 73), company law(article 77) and statistics (article 76) and surveillance (article 108). In addition, article 78 states “The Contracting Parties shall strengthen and broaden cooperation in the framework of the Community’s activities in the fields of:

– research and technological development,

– information services,

– the environment,

– education, training and youth,

– social policy,

– consumer protection,

– small and medium-sized enterprises,

– tourism,

– the audiovisual sector, and

– civil protection”

The EEA states  are not required to make the type of contribution required of EU members  to Brussels nor do they receive any funds from the EU.  However, they are  forced to follow the judgements of the  European Court of Justice,   they have to pay a membership fee towards “community cohesion, that is, they are required to subsidise the poorer EU states. (article 82).

The EEA states have no formal position within EU institutions such as the Council of Ministers, the EU Commission or the European Parliament.  Hence, EU decisions are made without their official involvement. In addition, the EEA states are required in practice to abide by the European Court of Justice’s rulings (article 105). However, there is a joint committee comprised of EU and EEA representatives (article 90).

If  the UK joined the EEA, in theory   they would not have to participate in these  areas of EU policy

“Common Agriculture and Fisheries Policies (although the Agreement contains provisions on various aspects of trade in agricultural and fish products);

Customs Union;

Common Trade Policy;

Common Foreign and Security Policy;

Justice and Home Affairs (even though the EFTA countries are part of the Schengen area); or

Monetary Union (EMU).”  (http://secretariat.efta.int/eea/eea-agreement.aspx)

However,  as we have consistently seen since Britain joined in 1973, the EU has constantly found ways of  expanding their powers either by stealth or through new treaties which are never resisted in the end even if national referenda reject them because the elites of all the EU and EEA countries are  committed Europhiles .  A  referenda rejects further EU integration; the elites arrange for another referendum  to get the “right” result  or produce a new Treaty  which is the rejected treaty in a new guise and then find an excuse not to hold a referendum on it , normally along the lines that it is not a constitutionally important treaty.

If  the UK is to regain its sovereignty it needs to withdraw completely from the EU for two reasons. First, if we accepted EEA membership or something like it, we should still be so heavily linked into the EU (and would almost certainly become more heavily involved as the EU expanded its remit), that the British political elite would always be able to argue that we were so much part of the EU we might as well go the whole hog and become full members. That argument would have resonance  with Europhiles, the resigned  and those who have no strong opinion either way about the EU. The second reason is that even as it stands EEA membership would deprive the UK of massive amounts of sovereignty including the most important of all sovereign powers, the ability to control who lives in a country.  If we are to leave,  the UK should deal with the EU and EEA countries as we do with any country outside the EU and EEA territories.

How easy would it be for the UK to leave? Article 50 of the Treaty  runs:

1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.

2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded  on behalf of the Union by the Council, acting by a qualified majority, after  obtaining the consent of the European Parliament.

3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.

4. For the purposes of paragraphs 2 and 3, the member of the European  Council or of the Council representing the withdrawing Member State  shall not participate in the discussions of the European Council or  Council or in decisions concerning it. A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.

5. If a State which has withdrawn from the Union asks to rejoin, its  request shall be subject to the procedure referred to in Article 49.

The assent  of the EU is required for a member to withdraw with an agreement in place, but withdrawal  without an agreement can take place after two years. However, the  Article does state that but  ”  the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal.” This seems to assume that an agreement will definitely have to be reached.  There is a possible ambiguity there which might be used to invalidate the leaving without agreement clause or at least   delay Britain  leaving while the matter was argued  out.

There would also be great scope for further prevarication. For example, the British Europhile elite would be happy to string things out in the hope that political  circumstances would  change to allow them to fudge any leaving agreement to tie Britain back into the EU and the agreement of the EU parliament  might  well be withheld  if any proposed agreement  deviated seriously from the shape of the  Norwegian or Swiss agreements.

But assuming Britain could leave after two years without an agreement,  it would still mean Britain being tied in for two years, during which period the EU could cause Britain a good deal of economic harm because  in principle  they could pass whatever new laws they wanted including those directed at Britain with malign intent,  and Britain would still be bound by EU laws for the two years. Or there could simply be administrative action.  Take immigration. There could be a deliberate policy to drive as many immigrants as possible into Britain within the two years.

If Britain left without an agreement after two years we would be in a much worse situation than simply announcing we will leave and leaving immediately. That would be technically illegal in terms of  the Treaty agreement, but whatever the Treaty says the reality is that if a state as large and wealthy  as the UK announced its withdrawal without conditions, the EU would accept it because they could do nothing to prevent it and imposing sanctions against the UK would be counter-productive because the UK runs a large trade deficit with the EU. Moreover,  any sanctions against the UK would ruin the Republic of Ireland, another EU member.

Membership of the European Economic Area is  a poisoned chalice.  Resist the temptation to drink from it.

Japan and The Big Society

The response of   Japan to the triple  disaster of a massive  earthquake, gigantic  tsunami and nuclear  power failure  has been surprising. One of the most advanced industrialised states  and the third largest economy in the world has struggled desperately to deal with what is admittedly a dramatic and unusually devastating multiple disaster .  Not only has there been no clear resolution of the  nuclear power station problem  after several weeks, but the response to the distress of those who have lost their homes and all the conveniences of a modern state has been strangely inadequate.  People have been left with not only no homes or power, but without food and clean water.  In the worst affected areas even the legendary honesty and social discipline of the Japanese has begun to break down with looting. (http://www.telegraph.co.uk/news/worldnews/asia/japan/japan-earthquake-and-tsunami-in/8395153/Japan-earthquake-Looting-reported-by-desperate-survivors.html)

Is the inadequacy of the Japanese response simply a result of the scale of the disaster or is there something within Japanese society which has caused the lack of  useful response?   The scale should certainly not be underestimated because the tsunami alone damaged hundreds of miles of coastline to a reported depth of ten miles in some places and the toll of those dead is officially put at 10,000 and the missing at 17,000 as of  25 3 2011 (http://www.telegraph.co.uk/news/worldnews/asia/japan/8405619/Japan-earthquake-death-toll-passes-10000.html).  Moreover, the on-going problem of the damaged nuclear plant must be  a tremendous distraction for the Japanese government. Nonetheless, it does seem rather odd to the outsider that the response to the provision of basic necessities to the dispossessed has been so slow and patchy. It argues for at best a lack of reasonable planning for civil disasters of which there is a high probability. Japan is part of the Pacific “ring-of-fire” earthquake zone and tsunamis are a regular feature of the area. It might be argued that building nuclear power stations in a notorious  earthquake zone   is not the brightest thing to do, but Japan has little by way of natural energy resources so it is possible to see  why they have done it. What is less easy to see is why they should have built stations close to the coast with the obvious danger of a tsunami following an earthquake or even a tsunami overwhelming the station on its own.  

If there was a serious  lack of civil disaster planning why would that be?   After all, the Japanese are famously good at paying attention to detail and behaving in a disciplined social manner.   Perhaps the answer lies in the very social cohesion which has meant that  the development of  the state has been much more restricted than it is in most developed countries.  Japan has a population of 125 million, approximately twice the size of that of  Britain.   The Japanese budget for the present year is  less than £700 billion (http://www.reuters.com/article/2010/12/24/us-japan-economy-idUSTRE6BN0FQ20101224?pageNumber=1). The British Government’s projected  spend for the coming financial year is £710 billion (http://www.telegraph.co.uk/finance/budget/8403115/Budget-2011-graphic-Spending-income-tax-shortfall.html).  Japan spends less than the UK on public provision despite have a population twice as large. This means that the proportion of public spending is very low compared with most developed economies, the Japanese GDP being around £3.2 trillion of which the state spends  less than 25% .  Compare that with UK public spending which is pushing 50% of GDP.  

The surprisingly  low level of  Japanese public spending in itself means that the capacity of the state to deal with major disasters is severely limited.   This difficulty is amplified by the very high Japanese National Debt  which is approximately twice GDP.  Servicing this takes up a good deal of the Japanese government’s budget.   Money for public projects is in short supply and  it is a moot point whether Japan can be said to have a welfare state (http://www.onejerusalem.com/2007/10/14/japan-no-welfare-state/). If you fall out of work or ill in Japan and you are without the support of your family or friends, you can rapidly become  destitute.

Why is Japanese state spending so low?  Most probably it is  a continuation of traditional Japanese social relationships where support comes from  not only family and friends, but the general neighbourhood  and,  in the case of large Japanese companies at least, the organisation of  a person’s life around the place of employment. There is nothing abnormal about such development because it is precisely what happened in other industrialised countries before the state grew large.  Moreover, for many Japanese after  1945 the security offered by a fully-fledged welfare state was  largely substituted  by the giant Japanese companies who offered a job-for-life and  organised an employee’s life around the  business.  Although the job-for-life  culture has suffered considerable degradation in the past twenty years,  it stood in the way of the expansion of the state.

There is an important lesson for Britain and other developed states here. Japanese society is organised broadly as Cameron’s Big Society is supposed to be organised, with the state standing back and individuals forming a nexus of social-help. The problems this creates are only too obvious.  Japan has insufficient state capacity to deal with dramas such as it is currently experiencing or to provide for those who fall by the economic wayside. More generally, the insecurity which prolonged economic weakness produces – Japan has arguably been in recession for twenty years – will tend to make people less and less willing to think of the common good  if the support mechanisms they rely on are  informal and local.  

There is no question that there is often considerable waste in public spending . However, too little public spending is a greater evil than too much (provided the spending does not overwhelm the economy)   because too little leaves no spare capacity  to deal with either chronic problems such as long term unemployment or sudden disasters such as earthquakes or tsunamis.

Film reviews – Inside Job

Documentary

Director Charles Ferguson

Narrator Matt Damon

Released 2010

Run time 1 hour 48 minutes

http://www.sonyclassics.com/insidejob/site/#/cast

The last time I felt so angry coming out of a cinema was after a viewing of  The Smartest Guys In the Room, the story of the Enron scandal.   In the case of the Inside Job,  it was not that I was  given much by way of new facts, for I know the story it told  only too well.  Rather, I became angry simply by watching the grotesque drama which led to the present global financial disaster unravel from its beginnings; a  story well flavoured with recordings of the main players in the catastrophe either showing their reckless disregard for society at large before the recession arrived or trying to justify their behaviour afterwards in the most contemptible  and frequently risible fashion. (Watch out  for Prof  Frederick Miskin  explaining why he resigned as Governor of the Federal Reserve Board when the going got tough. His reason?  That he had to go back to his university to revise a textbook).  To that was added the dismaying knowledge that nothing has really changed since Lehmann Bros went down in 2008, with  the bankers who caused the financial disaster  still pocketing vast amounts of money, most of it provided by taxpayers.  There are some outrages which never  cease to shock no matter how familiar they become. This is one of them.

Those who have seen The Smartest Guys in the Room  will have a good idea of the approach and tenor of Inside Job. For those who have not, imagine a Michael Moore documentary without Michael Moore.  There are no cheap tricks, no exhibitionist presenter; just  mercifully jargon-free explanations of technical financial instruments and interviews quietly conducted by the director which allow the virtuous to express their outrage and the guilty to hang themselves with their own words and behaviour.

The film concentrates primarily on the American experience,  but there is no harm in that because the USA  is both an exemplar for what happened in much of the developed world and was arguably the prime driver of the global crash because of its globally dominant economy, although Thatcherite Britain needed no encouragement to tread the same criminally reckless path.

The film leads us through the story of the wilful creation of instability in the global financial system.   Jimmy Carter  began the process with the Deregulation and Monetary Control Act  (1980) and  Reagan followed it  up with the Garn–St. Germain Depository Institutions Act (1982). These  Acts allowed  Savings and Loans associations  (equivalent to British Building Societies) to behave like banks without being subject to the then  tight regulations  (the Glass-Steagall Act from the Depression) which divided investment banking from institutions taking deposits on a retail basis.  This resulted in colossal losses in the late 1980s and early 1990s with a great deal of US taxpayers’  money being used to rescue to rescue the situation.  This  gave the green light to the unscrupulous who believed, broadly rightly, that if any financial institution was large enough, it would be bailed out by the US taxpayer.

The experience of  the Savings and Loans scandal did produce  legislation to regulate anew the homes loans industry with   the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA).  That Act had one great flaw: it gave the two quasi-state mortgage granting bodies  Freddie Mac and Fannie Mae a  responsibility to support mortgages for low to  moderate-income families. That drove  the sub-prime lending.

The greatest  breach in the regulatory wall occurred in 1999. In 1998 Citi Group was formed by the merger of the bank  Citicorp and financial conglomerate Travelers Group . The only problem was that the merger was illegal under the remaining provisions of the Glass-Steagall Act which forbade any one institution from acting as any combination of an investment bank, a commercial bank and an insurance company.  Citi Group did all three . But  Citi Group were given a temporary waiver to allow them to dispose of their conflicting business in an orderly fashion.  Happily for them and sadly for the rest of the world, they were never required to make the disposals because in 1999 the  Gramm–Leach–Bliley Act (GLB )  repealed the parts  of the Glass–Steagall Act of 1933 which regularised Citi Group’s position and opened the way for any other US financial institutions to follow suit.

The final nail in the economic coffin was the failure of the regulatory bodies  such as the Securities and Exchange Commission (SEC)  to take any meaningful action against the newly freed  financial monsters .

The film does two other things well.  It explains the complicated  method by which deregulation was exploited by banks and their ilk and graphically shows the incestuous traffic between  politics and finance  and the way that academic economists have been all too willing to compromise their integrity by becoming hired pens for whoever is willing to pay them.  

How did sub-prime lending  and the general derivative mania become so rampant? Well,  there was the boost given by  the Recovery and Enforcement Act of 1989 mentioned above, but that  could not  cause the reckless lending to spiral  completely out of control. That required  the  Gramm–Leach–Bliley Act. After that anything went.  Dealers could create derivatives to effectively make a bet on anything.  

Most devastating to economies was the creation of Collateral  Default Obligations (CDOs)  and Credit  Default  Swaps (CDSs). The beauty of these  for financiers was that they effectively allowed a seemingly unending shuffling of responsibility and risk to someone else. With CDOs the relationship between borrower and lender changed dramatically. In the old days the borrower obtained a loan and paid it back to the person who made the loan. With CDOs the lender sold on the debt to a third party who bundled up various loans –  be it a mortgage, credit card spending or some other loan – with of widely varying quality and called it a CDO. This CDO could be sold on to investors, frequently with an AAA rating by one of the main credit ratings agency who were paid by – yes you have guessed it – the people selling the CDOs to investors.  To make the business even more opaque, CDSs were created to insure against losses arising from defaulting CDOs, effectively a form of reinsurance.   The final act in this fantasy world was institutions insuring CDOs they thought were junk with CDSs.  This meant they were compensated  when the CDOs failed while the buyer of the CDOs lost.   

Eventually the game of financial musical chairs had to stop and Lehman Bros  came crashing down to signal the advent of the worst global recession since the 1930s.  An interesting claim in the film is that Lehman’s was allowed by the US government to fail because the financial officers of the Bush Government did not understand the international implications of Lehman’s failure, most notably in Britain where the administration rules are radically different from those  in the USA and resulted in Lehman’s London offices being immediately closed. .

As for the nexus of  vested influence, this includes politicians, bankers, lobbyists, academics and credit rating agencies. One of the most telling sequences in the film is battery of senior personnel from the three largest credit rating agencies Standard  and Poor, Moody’s and Fitches – who consistently valued worthless or near to worthless  derivatives as AAA – testifying before Congress that their ratings are “only opinions”.  Closely running them up for dissimulation, is Scott Talbott, leading lobbyist for the Financial Services Roundtable, a man sharing with Dr Pangloss a belief that everything is for the best in the best of all possible worlds.  Particularly striking is the predominance of ex-Goldman Sachs employees in US government posts, men such as Henry Paulson,  Larry Summers and Robert Reubin.  It is worth wondering what the US government’s response would have been if Goldman’s not Lehman Bros had been the first US banking bottle to fall off the wall.

If you think Obama has made a difference, think again. He has employed a host of people from the financial world with  hands still dirty from their involvement in the genesis of the financial mess,  many of whom have served in the previous administrations which presided over deregulation.  This went right to the top of his financial administration. He chose as his Secretary to the Treasury  Timothy  Geithner , a protégé  of George W Bush’s  Secretary of the Treasury Hank Paulson, a  man who was up to his armpits in the ideological swamp of deregulation, while  the current director of the White House National Economic Council is Larry Summers who was Clinton’s Secretary of the Treasury when the  Gramm-Leach-Bliley Act was passed  – Summers greeted the Act by saying  “This historic legislation will better enable American companies to compete in the new economy.” In addition,  Obama  successfully nominated Bush’s choice for  Chairman of the Federal Ben Bernanke  for a second term as Chairman.  Plus ca change….

The most contemptible  excuse given by politicians around the developed world for the present financial debacle is that no one saw it coming. This is a blatant lie.  The film parades a baker’s dozen of people  in positions prominent enough to have  their voice heard by those in power who did warn of what was coming;  people like Nouriel Roubini (Professor of Economics at the Stern School of Business),  Raghuran  Rajan (when he was chief economist of the IMF) and  Christine Lagrade (French Minister of Economy, Finance, Industry and Employment). 

The coda to the film is the stark fact that none of the people chiefly responsible for the financial meltdown  have either faced criminal charges or had the vast fortunes they made during the period removed.  That applies not only in the USA but Britain, where provision exists to remove limited liability from company directors where they have failed to behave responsibly. The only people who have lost are as usual the less well off.

Universal distraction

When was the last time that your politicians concentrated seriously  on British domestic issues?  Unable to recall? I’m not surprised because increasingly British politicians spend  their time involved with matters foreign.  This is partly because the ever more comprehensive media coverage of world events drives politicians to at least express opinions on every catastrophe, natural or man-made, in the world, but it  also  occurs because it is politically convenient. One week it is a war; the next a flood or earthquake; the following week a mining disaster; the next a famine.  There is always somewhere in the world which can be relied on to provide the diversion.

The political convenience has several aspects: it provides an opportunity for politicians to posture on what they fondly imagine is a world stage;  it  acts as propaganda for the liberal internationalist politics to which all leading British mainstream politicians subscribe and most importantly it  provides a distraction from  problems  at home and the domestic policies of governments and parties, policies which are generally at odds with what the mass of the population believes and wants.

The mainstream media generally supports the liberal internationalist creed of  the politicians and they are happy to pump out as much international coverage of turmoil and disaster as they can get because it both makes compelling viewing and they can always present this as evidence that “we are all part of  one world” with the politically correct add-on, implied or overt,   that “we”  should do something to alleviate matters. As a tasty coda the media will, whenever possible,  try to imply that “we”, that is, the developed world in general and Britain in particular, are to blame for what misfortune is being covered.  The real “we” is of course not the British people but the British elite.

Tied into the national political class are all those who are involved  at the international level. This includes the British public servants involved with international matters; politicians engaged at the supra-national level such as MEPs; British  bureaucrats attached to the likes of the EU, NATO and the UN and all its agencies;  NGOs including charities and multinational companies.  All of these have a vested interest in at least seeing that the status quo is maintained and,  in the case of the politically motivated who subscribe to “one worldism” and large multinationals,  it is in their interest to see that Britain have  its sovereignty diluted as far as possible.

That leaves the general public who are constantly being asked by politicians and mediafolk  to concentrate on matters over which they have no control and frequently no interest in.  This results either in a disengagement from politics generally or a bemused and increasingly stunned concentration on foreign happenings to the exclusion of what is happening or not happening under their noses.  It is at best a modern version of bread and circuses.

The upshot is that British politicians are increasingly able to ignore what  Britain needs and what its people want.  Mass immigration goes unchecked;  the EU moves with increasing speed to rob Britain of her remaining sovereign powers;  Britain is still involved in illegal wars and our politicians show a worrying appetite for more of the same; the coalition Government  purely  for reasons of crude party politics causally calls a referendum (without any minimum turnout) to change Britain’s voting system from one which generally gives a clear electoral decision to one guaranteed to saddle her with more or less perpetual  coalition government ; ever more repressive laws are passed both giving the state and police more powers ;  political correctness is enshrined ever more deeply  in official British life; our armed forces are driven into an ever smaller and more misshapen remnant of what is needed to defend Britain; there is a continuing failure to ensure Britain’s future energy supplies;  Britain’s ability to feed itself is rapidly diminishing;   England remains without a Parliament unlike the other home countries; English taxpayers money continues to massively subsidise the Celtic Fringe;  British taxpayers money is cavalierly given to foreigners, most substantially through Aid;  UN funding and to the EU while British public services are culled;  the mania for privatisation goes on,  most tragically in the NHS; a housing shortage on a par with that after 1945 is developing; Britons on even average incomes are finding it impossible to raise children in decent comfort; the genuinely poor are increasing raidly; British politicians continue to behave corruptly and venally despite the Parliamentary expenses scandal  and the bankers who brought Britain to her present dire financial state remain not only unpunished, not one having even had their limited liability removed let alone criminal charges preferred,  but scandalously continuing to draw grotesquely high pay and promoting the same time of insanely risky investment behaviour which caused the present financial turmoil.

Those are the most important issues Britain faces . They are being ignored by  Britain’s politicians who increasingly are powerless actors on a stage delivering the words and actions of others.  The British public are left as a helpless audience knowing that no matter how loud they boo the show will go on.

Market economies and the illusion of choice

One of the prime arguments for introducing business practices, private money and private business into public provision is that it improves choice. British citizens, increasingly referred to as consumers or customers rather than patients, passengers or any other appellation which emphasises the public nature of the provision, supposedly want choices of schools for their children and to go to the “best” hospital or to enjoy the “superior” service coming from private companies with public provision contracts such as those running the railways or utilities such as water or gas.

Take the case of the privatised railways. Before privatisation all a passenger had to do was buy a ticket and get on a train. The only thing the passenger had to consider was whether there was a time or date restriction on the ticket. Now, the passenger has to not merely worry about time and date, but whether he or she is getting on a train run by a particular company – how many people have been on an intercity train when the ticket inspector has got into a dispute with someone who has bought a ticket for the train’s destination but it is the wrong ticket for that particular train? The customer is also besieged by a bewildering array of pricing, far more than was on offer when the railway was state owned.

I doubt whether the average passenger welcomes either the multiplicity of carriers or ticket prices. A person can have too much choice. Human beings want some but not a vast amount, which merely becomes confusing. If you want to travel somewhere you do not want it to be a demanding exercise in both finding out what the cheapest fare is and ensuring that the terms of the ticket are not inadvertently breached.

Does market competition produce greater choice even in a “free market”? There is a good argument to say it does not. The natural tendency of a free market is to produce reduced competition. Governments of all colours in countries which have a large free enterprise component to their economy recognise this by maintaining anti-monopoly legislation. (What are called free market economies are in fact state regulated economies and regulated in the most fundamental way, ie the prevention of increase of market share beyond a certain point).

But anti-monopoly legislation only prevents the worst anti-competitive excesses. There is still very wide scope for anti-competitive forces, especially in capital intensive and technologically advanced industries – think Microsoft and operating systems or airliners in a market of two or three suppliers.

But the process is a general one. Even enterprises which are not innately capital intensive are affected. Retailing is a good example. A hundred years ago department stores were still in their infancy. Supermarkets and shopping Malls unknown. The vast majority of purchases were made from small, privately owned shops or from open air markets. Most of the shops specialised in a narrow trade.

Today we have far fewer shops and markets. Supermarkets and Shopping Malls abound. The chain stores of at most a few dozen companies become ever more pervasive. There are many fewer specialist shops. The private retailer is assaulted from all sides by the large multiple-store retailers and increasingly succumbs as the public is seduced by the immediate temptations of price and convenience without regard to the social long-term consequences of what they do. The privately owned shop does not even have to be in the immediate vicinity of a giant chain store to suffer. It merely has to be within reasonable driving distance of the chain store. The consequence is that the poorer areas of larger towns and cities and country villages and small towns are denuded of their shops. The choice of the poorer residents of such places is tremendously reduced. The wealthier do not of course care about this because it has no direct effect on them. They have the wherewithal to either live in areas well serviced by stores and services or can afford to drive to the large supermarkets or have goods delivered from far afield. Such developments fall within the remit of government. It is not for Government to operate supermarkets but it is within their remit to prevent commercial behaviour which is anti-social.

What constitutes choice anyway? Is it, for example, having more shops offering a smaller range of products or fewer shops offering a greater range of product? In practice fewer shops will mean reduced variety of product as well as service. But what of all the choice in giant supermarkets you say? Do they not have a much greater range of product? Surely they provide more choice. They may provide a greater range in one place but that is all.

The advent of industrial-style agri-farming, the bringing in of increased amounts of imported food from around the world and introduction of new manufactured foods may give the impression of greater choice, but is an illusion. The number of varieties of staple fruits and vegetables has been massively reduced, as have the various breeds of farm animals.

Of course, the providers of anything which sells can always say “If people didn’t want it they wouldn’t buy it”. But that begs the question of what alternatives are available. If only three types of washing powder were available doubtless they would sell massively more than any one brand does now. That does not mean they are more popular merely that people have to have such a product and were forced to buy one of the three brands available. Such restriction of choice is increasingly commonplace . We fool ourselves if we buy into the laissez faire economics  = more choice.

Most people cannot make provision for the future

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

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

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

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

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

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

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

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

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

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

What shall we do about the old?

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

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

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

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

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

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

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

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

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

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

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

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

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

Does the Welfare State corrupt?

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

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

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

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

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

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

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

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

%d bloggers like this: