Gambling with the future

Tweet

 

For just about the whole of my life, mankind has been on the brink of creating controlled nuclear fusion; it’s always been just ‘thirty years away’. There is no doubt that the technology offers the potential to generate huge amounts of electricity, with fewer of the problems (such as radioactive waste) associated with nuclear fission, although the link between ‘peaceful’ research and the development of ever more powerful weapons remains. Similarly, there is no doubt that progress has been made in many of the technologies involved in building a working reactor, and that some of that progress has benefits in itself, apart from energy generation. Most experts in the field believe, however, that there is still another thirty years or so before remaining problems can be resolved, and the process scaled up and commercialised.

None of that is to suggest that work shouldn’t continue, but using the ‘imminence’ of a breakthrough as an excuse to avoid taking other actions would be folly. Which brings us to the recent words of the US Energy Secretary, Chris Wright. Not only is he considerably more optimistic ("The technology, it'll be on the electric grid, you know, in eight to 15 years") than people actually working in the field, he also sees that as an opportunity to continue to pursue maximal exploitation of fossil fuels in the meantime. By coincidence (?), he happens to have founded and run fracking companies, and believes that the fracking process will "bring back manufacturing and blue-collar jobs and drive down not just electricity prices, but home-heating prices and industrial energy prices".

He doesn’t seem to believe that anthropogenic climate change is as complete a hoax as some opponents of the concept of aiming at net zero do, but he clearly does believe that it’s not as imminent as the scientific consensus suggests, and that we have generations in which to do something, so we can continue to use, and profit from, fossil fuels in the meantime. However improbable it might seem, it’s not entirely impossible that he’s right – scientific consensus has been proved wrong in the past in the light of new discoveries. It’s a gamble, though, and the stakes are incredibly high. Neither he nor I will be around to see the full outcome of decisions being taken today, although he and his mates probably will be around long enough to enjoy the profits they make from oil and gas. That, I suspect, rather than any real concern for the planet or the people living on it, is the real driver of his selective take on climate science.

Second choices need to be counted, not assumed

Tweet

 

Following the result of a by-election in the Vale of Glamorgan last week, some partisan commenters have attempted to make the argument ‘vote Green, get Reform’, or ‘vote Labour, get Reform’. There’s certainly a mathematical basis for such suggestions: added to the vote of the second-placed Plaid candidate, either the votes cast for the Green candidate or those cast for the Labour candidate would have been enough to secure a victory for Plaid had one or other of those parties chosen not to stand. By the same token, however, if the Conservatives had not stood a candidate and all of those votes had gone to Reform Ltd, then Reform Ltd would have won, even if there had only been two candidates in the race. Whataboutery works both ways.

The bigger problem with the argument that voting for one party ‘allows’ another to win is that it makes assumptions about what people’s second choices would have been and about how voters choose a party. In an ideal world, maybe we would all sit down with the detailed manifestos of the various parties and assess which one most closely represents our own views, which comes second and so on, and then assess which of our acceptable choices has the best chance of winning before casting a vote. In the real world, the first doesn’t happen and the second requires a degree of knowledge about what other voters are going to do which owes nothing to science and everything to guesswork and rumour.

Years of direct doorstep experience tells me that, whilst those 85 who voted Green should logically have put Plaid as their second choice (both parties favour Welsh independence, and both have strong environmental credentials, although Plaid is somewhat shaky, to say the least, on energy policy), it is highly unlikely that they would all have done so. Some would have chosen Labour, some the Tories, others would have stayed at home – and I’d be very surprised indeed if at least a couple hadn’t opted for Reform Ltd. Similar considerations apply to those who voted for each of the other parties: the basis on which people choose a party to support is much more complex than an analysis of policy positions.

Back in the days when Plaid would have been seen as a ‘no-hope’ party in places like Barri, I and other candidates (I did once stand in a ward in Barri itself) used to argue that people should vote for the party they most want to see win, rather than against the one that they most want to see lose, whilst those parties seen as having a real chance at winning argued that people should vote for the least distasteful of them rather than ‘wasting’ their vote. Now that Plaid is seriously in contention in such seats, it’s no surprise (even if a little disappointing) to find those positions reversed.

The real lesson of the by-election is that an electoral system based on first-past-the-post where more than two parties are involved can deliver seats to a party which enjoys only minority support – and the more parties in serious contention (there were four in this case), the lower the percentage of the vote needed to win. If we really want to know about people’s second choices, we need to count them. A system of proportional representation wouldn’t necessarily stop the rise of Reform Ltd (I suspect that a number of people in all parties would be unpleasantly surprised to see how many of their supporters would give their second vote to Farage’s lot), but it would be likely to deny absolute power to any party which cannot demonstrate broader support. The question is whether the government in Westminster is able to understand that, and make the change before the next UK-wide parliamentary election. Rueing the day afterwards will be too late.

Rushing to judgement

Tweet

 

No-one yet knows exactly what drove Tyler Robinson, allegedly, to shoot Charlie Kirk last week, although that hasn’t stopped various people declaring the reason with absolute certainty. Trump, along with Musk and sundry other unhinged Americans, have claimed that it was the ‘radical left lunatics’ (which seems to be code for everyone from ‘only moderately right-wing Democrats’  to actual socialists). Some even went so far as to demand the designation of the Democrats as a terrorist organisation and the immediate incarceration of all party members, on the basis that the action of one man who probably wasn’t a Democrat anyway was enough to make them all guilty. Others have suggested that the shooter was a Groyper (no, I’d never heard of them either) and that Kirk was shot for not being right wing enough. A third theory is that the killing was much more personal and less political than that, because the shooter may have been in a relationship with a transgender person, something which was anathema to Kirk. Time will tell.

If only half of what I’ve read since the shooting is true, Kirk seems to have held what many of us would consider to be some deeply unpleasant and hateful views. They don’t justify shooting him, of course – we shouldn’t even need to say that – but he was highly polarising, and made plenty of enemies. There are, though, some double standards at work here. It’s only a matter of days ago that Trump openly celebrated the extra-judicial killing of 11 people aboard a boat which he claimed was trafficking drugs to the US. Even if he was right about their intentions (and the only thing stopping me giving him the benefit of any doubt about that is his usual inability to tell the truth about anything), the crime which they were committing was not one which would be punishable by death in the US itself. Arbitrary application of capital punishment by presidential whim without any process at all does not sit well alongside a condemnation of an assassination on US soil; it implies that the objection is not to killings per se, but is based on drawing a distinction between victims based on the president’s opinions.

The argument for the warning-free attack on the alleged drug smugglers is that killing 11 of them will prevent many more deaths from drugs amongst US citizens (of whom, apparently, around 300 million out of a total population of 340 million were killed by drug overdoses last year – according to Trump). Balancing good and evil is a thing which governments do, but the problem is around certainty. There’s a parallel with the old historical dilemma: if someone had assassinated Hitler in 1936, or Stalin in 1924 – before either of them had presided over mass murder – would history see the assassin as a hero or a villain? We can never know whether, or to what extent, history would have been changed, because we can only ‘know’ about the history that actually happened. Killing people as a precautionary measure against the drugs they are smuggling, or the hate they are spreading, in an attempt to prevent harm which might or might not be caused in the future, is a dangerous approach which ultimately leaves all of us open to an arbitrary application of ‘justice’. That’s as true for actions taken by governments as it is for those taken by lynch mobs or lone individuals – trying to draw distinctions merely blurs a clear moral line.

A tale of two Peters

Tweet

 

Back in 1997, John Prescott held up a crab in a jar of water and told the world that the crab was called Peter. The name was not chosen at random. Peter (the other one, not the crab; details of the subsequent career of the crab, who was actually a female called Dennis even if she didn’t know it herself, are lost to history) has led a somewhat chequered career, having been forced to resign from government posts twice over different scandals: in 1998 and again three years later. The common thread in both resignations was his over-familiarity with the very rich. It’s a theme which has run through his life.

His latest ‘resignation’ is down to much the same thing: a familiarity with, and willingness to overlook the failings of, a very rich man. In this case, it was Jeffrey Epstein, the source of whose wealth itself remains a mystery to many, although neither of the two Peters are known to care very much about the provenance of that wealth. In the crab’s case, that is entirely forgivable. Those who resisted his enforced departure from his latest role think that he was an effective bridge to Trump. Perhaps being tarred with the same Epsteinian brush is indeed actually an advantage. Being joint contributors to the Epstein birthday book gives them something in common, even though only one of them has admitted it to date. Trump continues to deny that the words, artwork and signature are his.

Trump’s supporters concentrate on the signature, claiming – despite all appearances – that it’s nothing like Trump’s own signature. Somehow, it seems that the Democrats (I mean, of course, ‘radical left lunatics’) had forged his signature 30 years ago (when he was a Democrat himself, before, obviously, they became ‘radical left lunatics’), as a hoax and planted it in a book ready to reveal it when he became a Republican president for the second time. There is probably a universe in which that is credible – it just isn’t this one. I wonder, though, if they’re concentrating on the wrong thing. What if the signature is genuine, but the words above it aren’t? I mean, setting out an imaginary conversation requires the deployment of imagination doesn’t it? And is ‘enigma’ really part of his vocabulary? I suspect that he really didn’t write the words himself. Maybe someone else did it at his behest and presented it to him to sign, or maybe he was tricked into signing it. He might stand a better chance of being believed if he admitted that the signature was genuine, but claimed he was fooled into signing it. In his case, being a fool would be a highly credible defence.

The crab’s namesake has no such defence. He really did write the words attributed to him. He was long overdue another ‘resignation’.

Who gets the benefits of technology?

Tweet

 

Politicians from those increasingly pea-in-the-pod parties, the Tories and Reform Ltd, have come up with a solution to the strike by train drivers on the London Underground: replace them with technology. Well, when I say ‘solution’, I (like them) am obviously referring to future strikes rather than the current one; whether the cost of automation is the £10 billion claimed by Sadiq Khan or some arbitrary lower figure pulled out of Farage’s flat cap (clue: based on historical trends in public infrastructure, Khan’s figure is almost certainly an underestimate, not an overestimate), it would take years to implement. The suggestion might generate the odd headline, but it’s not going to address the immediate dispute.

Promising to replace anyone who goes on strike with technology is an ‘interesting’ approach. Not only is it likely to be extremely costly, but (unless alternative jobs appear somewhere else), there is at least an outside chance that it adds to the numbers of unemployed people claiming benefits. They haven’t been imaginative enough though. Many of those whose journeys have been disrupted are commuters travelling to and from work – if they were replaced by technology, London wouldn’t need the trains at all. Maybe I shouldn’t give them ideas.

Whether in response to the disruption caused by strikes or not, it is clear that technology will eventually replace humans in a number of roles, and sooner or later, that is likely to include the introduction of driverless trains. Fans of automation like to claim that replacement of vast swathes of the working population by robots, computers and AI will actually create new opportunities, pointing out that that is what has always happened with new technology in the past. Perhaps they’ll be proved right, but the fact that it’s happened previously isn’t always a good guide, and even if it does, there’s likely to be a transitional period during which new jobs may not match, in terms of numbers and skills, those destroyed. One of the long-promised advantages of technology has been the idea that humans would have more time for leisure and cultural activities rather than being bound to a rigid timetable laid down by their bosses. Whether that’s ever achievable depends in large measure on how the benefits are shared. The omens are not good; as things stand, benefits are likely to flow to the richest rather than the no-longer-needed workers.

But, just supposing for a moment that we collectively decided that the benefits should be more widely shared, how might such a reduction in the need for workers be managed in a mutually acceptable way? One way of doing that might be through a gradual reduction in working hours without a reduction in pay running in parallel with the introduction of more and more technology. We can assume that capitalists and their political representatives will resist that all the way, as they have always resisted the idea that workers, not just capitalists, should benefit from innovation. By coincidence, it’s worth noting that at the heart of the current dispute on the London Underground is a demand for a reduction in working hours to 4 days / 32 hours per week with no cut in pay. Seeing the introduction of technology (and sacking workers as a result) as an alternative to that, rather than a potential complement, tells us a lot about the nature of the battle still to come over sharing the benefits of technology.

Maybe we need a 'bad chaps' theory of government

Tweet

 

In a plot twist so obvious and predictable that even Nadine Dorries would have avoided writing it, it has emerged that former PM Boris Johnson appears to have been using the public funds allocated to his office, alongside his contacts made whilst in office, to enrich himself. Yawn. Labour’s Margaret Hodge declared that the reports suggest that “Boris Johnson is prepared to break the ethical standards of behaviour” (yawn again) and appeared to have acted “with complete impunity” (double yawn). From a man who has gone through life ignoring all rules and doing as he pleased to satisfy his own needs and desires, none of this is a shock or even a mild surprise. None of which stopped the Lib Dems’ Cabinet Office spokesperson Sarah Olney from declaring that “These allegations are extremely shocking”. Anyone genuinely shocked by these allegations would probably also be surprised to discover that the Pope is a Catholic. Even the Lib Dems can’t be that naïve.

The Guardian’s report also states that: “Revelations from the Boris Files will place pressure on Johnson to explain how some of his recent contacts with foreign governments on behalf of commercial interest fall within the rules”. No they won’t. This is a man completely impervious to pressure or criticism, and who adheres to the Mary Poppins maxim of never explaining anything. In this case, the ‘rules’ he has broken appear to be both unwritten and unenforceable. All the revelations really prove is that the ‘good chap’ theory of government only works when those involved are ‘good chaps’. But there is no mechanism for ensuring that they are – or for dealing with those who aren’t. And we already knew that.

Orthodoxy was always the intention of the OBR

Tweet

 

Criticism from within the Labour Party about the remit and actions of the Office for Budget Responsibility and the slavish adherence to its conclusions by the Chancellor is long overdue. It’s a pity that it’s taken an accidental slide into an election for a new deputy leader to wake anybody up, but no sooner had Haigh launched the mission than she declared that she was not going to be a candidate. Whether it was never her intention or whether the campaign was halted before it got going by the stitch-up giving candidates just days to collect 80 supporters from among the party’s MPs is unclear. Paradoxically, the fact that the attack on financial orthodoxy is no longer associated with an internal leadership election might make it easier to take it seriously. Candidates for internal elections in the Labour Party have traditionally argued from the ‘left’ to attract the votes of the members, only to end up moving to the right once elected. Sir Starmer is a classic example of the genre.

I don’t agree with Haigh’s definition of the problem in terms of the OBR having been “Originally created to provide an independent check on economic forecasts and help policymaking” or that it “has morphed into a gatekeeper of orthodoxy”. It has always seemed to me that it was a deliberate trap set by George Osborne as some sort of insurance against a future Labour government, and that institutionalising (Tory) orthodoxy was its main aim from the outset. The enthusiasm with which Labour ran into the trap was astounding. Some have interpreted recent appointments by Sir Starmer as an attempt to undermine his Chancellor, but those he’s appointed seem almost to be even more steeped in orthodoxy than Reeves herself: more about keeping her on the narrow track and reinforcing her view of economics in 10 Downing Street than undermining her.

Other than that faulty analysis of how we got to where we are, Haigh makes some very good points. Her claim that “It is beyond comprehension” that the Bank of England is paying interest on central bank reserves to commercial lenders echoes a point that a number of economists have repeatedly made – and there are plenty of examples of other countries that do not make such payments. At a stroke, not making these payments (or even just reducing the entirely arbitrary interest rate paid) would ‘save’ up to £40 billion a year, and make a big difference to the government’s income and expenditure accounts. The only reason for not changing this is a Chancellor and PM who are utterly wedded to the ‘household analogy’ for government accounts and think that austerity and a small state are really good ideas.

Sadly, someone holding views such as those expressed by Haigh would be extremely unlikely to be elected as Labour’s deputy leader, even if she were to stand; and, either way, her influence on government policy from outside the cabinet (and there is little chance of Sir Starmer appointing the winner of the contest to his cabinet, with the position of deputy PM already neatly sewn up) will be small. Not enough to change the narrative and approach of her party’s leadership, most of whose MPs seem quite content to continue down the road of facilitating Farage. They are far too comfortable languishing in the trap which Osborne laid for them.

Upping the stakes

Tweet

 

President Trump has been widely (and justifiably) mocked for his promise to reduce the price of medicines in the US by up to 1,500%. It’s an illustration of his somewhat shaky grasp of elementary mathematics, although I suppose it helps to explain how he managed to bankrupt casinos. By and large, UK politicians have not shown themselves to be quite so mathematically challenged as Trump, and the argument about the extent to which immigration should be allowed has largely stayed on the positive side of zero. Until last week.

Robert Jenrick has now attempted to trump Labour, Reform and his own party by calling for a ten year period in which net migration to the UK should be negative. It’s a reduction of more than 100% in the level of immigration, even if it’s not yet quite in the Trumpian league of 1,500%. Give him time. But given what we know about the falling birth rate, he is effectively demanding that the population of the UK should be cut as a deliberate act of government policy. To say that it puts him somewhat outside the normal range of political consensus is an understatement: other politicians (including both Farage and Badenoch) have recently been calling for measures to increase the birth rate to tackle the potential problems associated with a declining population (even though that rather ignores the fact that using an increased birthrate to fill gaps in the UK economy has a rather lengthy lead time). But being outside the consensus is probably what he’s after.

The consequences of a falling population would be significant, not least because those being driven, or encouraged, to leave are likely to be of working age and therefore making a positive contribution to the productive economy. Unless, of course, he wants to offer incentives – which an increasing number of us might even be willing to consider, with madmen like Jenrick and Farage in danger of leading a government – for UK pensioners to emigrate. I suspect not, however: something tells me that predominantly white UK-born people aren’t the ones he wants to get rid of. He hasn’t yet offered a solution to that economic conundrum, and probably won’t. Not only because there isn’t a simple one, but also because spelling out the consequences might somewhat undermine the blatant appeal to prejudice.

It would also be seriously at odds with the rest of his political philosophy. Actually, a reduced population would not, in itself, be an entirely bad thing, ignoring for a moment that merely moving people from one country to another doesn’t exactly achieve an overall reduction. It would reduce the demand for finite resources which is hardly a poor idea, but it would also require a significant rethink in the way the economy works to ensure that economic benefits are shared more equally rather than being increasingly concentrated in fewer and fewer hands. That, or force an increasing proportion of the population into poverty, which is not an obvious election-winning strategy, particularly if the deliberately-impoverished come from the voting demographic being wooed by his rhetoric. As they inevitably would. We shall have to see who will attempt to out-compete him, by assigning a hard number to the target for exporting residents in a government-sponsored people trafficking scheme. The way things are going, I wouldn’t put it past Labour to open the bidding.

Papers, please?

Tweet

 

There are some advantages to the idea of issuing ID cards to all, but unsurprisingly they’re not necessarily the ones which advocates use, nor are they as easily implemented as those advocates have suggested. The sort of electronic ID which is being mooted could make it easier for citizens to access government services, depending on how it is implemented. They could make it easier to prove identity when seeking credit, or buying age-restricted products. They also have some potential advantages in policing, although that only works if people are obliged to carry them. It is precisely that potential obligation to carry them which raises concerns for many, as well as carrying echoes of an unpleasant past. There’s a practical obstacle as well: whilst most of us do have smartphones these days, not everyone does, and even those who do don’t always feel it essential to carry them at all times.

One of the more novel reasons suggested this week for implementing ID cards is that it would allegedly help to reduce the ‘pull factor’ of the UK economy, which means that the UK apparently attracts migrants because they find it easy to get work in the black economy. To say that I’m unconvinced about the logic of that would be an understatement. If people are able to get work in the black economy without a NI number and without paying PAYE, then what exactly is the mechanism by which the need to have electronic ID changes that? An employer prepared to take on a member of staff without that person demonstrating the right to work in the UK is no more likely to demand to see an ID, whether physical or electronic, than (s)he is to demand a NI number. It’s called the black economy for a reason.

I’m not a huge fan of the idea of ‘British values’, largely because I’ve never seen a clear definition of them which is anything like uniquely British nor which comes close to matching the observed values of those who claim to espouse them. But given that they are supposed to be a thing, to the extent that I understand what that thing is there’s something very un-British about any move towards a ‘Papers, please!’ type of society. And there’s something very dishonest (another breach of those same values?) about a claim that doing so will reduce migration. Authoritarians always want more control over citizens, and this looks like another attempt to get that, using whatever short-term crowd-pleasing argument comes to hand.

We shouldn't be driven by speculators

Tweet

 

The market for government bonds works in what looks to most of us a very strange way. Despite the newspaper headlines about rising interest rates, the interest rate is actually fixed for the whole term of the bond. What appears to make the interest rate change is that the bonds can be traded, and the price at which they are traded doesn’t necessarily bear any relationship to the amount which the government accepted into savings when it issued the bond or the amount which it is obliged to return to the saver when the bond matures. So a £100 bond issued at 3% for 30 years will cost the government £3 a year in interest, and the government will refund £100 at the end of the term. In the meantime, that bond may have been bought and sold many times at varying prices: for anyone buying at less than £100, the interest rate will look higher than 3% and for anyone buying at more than £100, it will look lower than 3%. But, to the government, it is always £3 per year. For any new bonds, the government might need to match the apparent interest rate being paid on existing bonds, but changes in the bond market price do not and cannot affect the cost of existing commitments.

It means that headlines about rises in the rate of interest increasing the cost of ‘borrowing’ and putting huge additional pressure on the government can be misleading. They only increase the cost of ‘borrowing’ on any new bonds issued, not on all bonds currently in existence, although one wouldn’t necessarily understand that from the headlines. There are a number of factors which have pushed the rate for new bonds upwards, not all of which are in the control of the Chancellor. Many of them are part of global rather than local trends. The extent of the impact of the required higher rates depends on whether, and to what extent, the government is obliged to issue new bonds to cover its spending. The Chancellor and government choose to believe that they have no choice in the matter, a conclusion which pushes them inevitably in the direction of austerity and/or tax rises, which just happens to suit their own ideological view. It isn’t the only view, though. As Professor Richard Murphy points out, the government could simply stop issuing bonds and wait for the price to fall, as it inevitably will.

Murphy isn’t alone in challenging the tyranny of the bond markets. There was a letter from another professor in Wednesday’s Guardian addressing the question of bond markets very succinctly. To quote Professor Kushner, bond traders “…strive to reduce long-term stability to short-term volatility in order to multiply transactional opportunities”; in other words the price (and therefore the headline interest rate) is very largely being driven by gamblers and speculators out to make a quick buck rather than by investors making long term decisions. A half-decent Chancellor would seek to isolate us from, rather than fall into line with, the interests of such casino capitalism. It really is time to challenge and smash the hold which these people have on economic policy rather than allow them to cripple the ‘real’ economy in which most of us live in order to satisfy their greed and selfish interests.