Scotland should be re-considering whether or not to be dictated to by England — though many in Scotland are scared to relinquish our dependence.
We are part of humanity — we need others — but in what way has the close relationship with a complex England been truly to the overall benefit of the Scot’s Nation.
If so-called Independence is to work we need to answer the most crucial practical question — “What about the Money?”.
The following is by Andrew Hughes Hallett who is an honorary professor at St Andrews University school of economics and a member of the Sustainable Growth Commission
Published, as follows, in “The National” —
Stability & Flexibility are at the Heart of the Currency Debate
ANY currency regime poses a trade-off between financial stability and flexibility to boost growth, job creation and investment. More of one means less of the other. This may be true in the short run, but definitely not in the long run as the Irish examples (or the section on floating) below show. The way out is to use currency/monetary policy to provide stability, and internal policies to provide flexibility.
Otherwise the conflict will be between do you want to preserve the value of your pension, or flexibility in the (vain) hope of boosting growth to create new pensions?
Explaining the Currency Options
1. (Multilateral) Currency Union
ALL participants share a single currency, hence a single monetary policy (interest rate) and a single exchange rate. The important point is that all participants, however small, contribute to making the decisions on what that single monetary policy/exchange rate should be. Small countries will have little separate effect, but the principle is there. Most likely, but not absolutely certain, this will involve sharing a common financial and prudential regulatory framework. It was this last part that the Bank of England refused to allow in 2014; but the European regulation framework could have been used instead (with the UK then in the EU).
The only existing currency union of that kind is the Euro System, unless you want to include the US Federal System with its regional feds having partial policy voting power. The UK currency union is not of this kind, being a unilateral union with no regional inputs. It seems unlikely, Scotland having been in that position for 300 years, that we could get a step up at this point. On the other hand, Scotland loses nothing by not getting ah upgrade.
2. (Unilateral) Currency Union
THIS is where you simply chose to use the currency of another economy whose monetary management appears to be more disciplined than yours or in line with your goals. No one can stop you doing that, but you do have to take the interest rates and exchange rate of the other economy. However, in compensation, you get greater financial stability, certainty or financial protection from bad shocks than you could manage on your own. If you wish to pursue your own goals, different from the other economy, you have to use internal policies (fiscal policy, diversification, competitiveness, productivity policies) to make up the difference. You are always free to do that, but as a small economy the scope for doing so in practice may be limited.
There are a number of examples where this regime has been surprisingly successful: Ireland after independence; also Ecuador, Panama and Montenegro, whose performance has been very strong when compared to what went before.
3. A Currency Union
IN this regime, you are able to issue your own currency but only 1-1 as each unit of the currency (or basket of currencies) to which you are pegged comes in through trade or investment. This is relatively easy to organise, but does depend on maintaining strong governance arrangements and a sensible choice of currency/ies to peg to (reflecting the pattern of trade and investment partners). It is fair to say that Argentina fell down by a poor choice of, and weak enforcement of, the governance arrangements, and by choosing the wrong peg currencies when-they tried this option in the 1990s. And we face the same restricted room for manoeuvre for small countries if they wish to maintain both financial stability and flexibility in pursuit of their goals.
If a proposal for Scotland were implemented along these lines, the gains over other currency regimes could easily be more apparent than real.
On the other hand, there are instances where this regime has been outstandingly successful in securing financial stability and the growth, low inflation, job creation goals Scotland needs: eg the Baltics in the 1990s, China and most of all Hong Kong since 1977. Who would not want that? These examples make a strong case for a customs union, if properly designed and managed, as part of the Sustainable Growth Commission’s proposal.
4. Floating (a pure or managed float)
HERE your own currency’s value is left to fluctuate with market forces, perhaps with interventions to buy (sell) the currency from reserves to smooth out the larger fluctuations on the down (up) side. Typically this works as long as there are reserves left with which to intervene. But then the ability to maintain a coherent currency regime is gone (and with it any financial stability). This is because the financial markets flexibility to pursue domestic goals by domestic monetary policy (devaluing to generate additional demand, growth and jobs). This is possible in the short run. But it would generate extra inflation because imports cost more, and hence losses in competitiveness that destroy that extra growth and those jobs; in which case nothing has been gained but quite a lot lost (not least because Scotland would have signaled that she had chosen a regime to try the same trick again when circumstances get difficult).
There is no advantage to accelerating that effect by signaling it in advance by cancelling the six tests.
It takes very little in extra inflation to create a loss in competitiveness. Much better to try to get the same flexibility by using domestic policies: fiscal policy, structural reform, productivity growth.
There are lots of examples where this floating strategy hasn’t worked well – Mitterrand in France in the 1980s; UK at various times; Italy.
But the clearest example is Ireland in the 1979-1982 period – but none where it has worked in the absence of support from internal domestic policies.
What impact could the SNP leadership position have on EU membership?
THE Sustainable Growth Commission does not take a position on EU (or Euro) membership. But its recommendations are carefully constructed to at least keep open the prospect of EU membership. And a currency framework designed to ensure financial stability will make Scotland’s membership more attractive from an EU perspective.
How would the Sustainable Growth Commission proposal work – and would we have to join the euro?
THE unilateral currency union part of the proposal is fairly straightforward. It would work as now, once the question of financial regulation is settled. Various options on how to settle that question are discussed in the commission’s report, including those not dependent on the UK.
The second (currency board) part is more subtle. Here is one possibility, though what would finally be adopted is a question for the Scottish people and Scottish Parliament to decide. The main concern with a currency board is whether it has sufficient reserves and discipline to weather a severe j recession or speculative attack.
One of the purposes of the six tests is to demonstrate that it has. And one of the purposes of the first (currency union) part is to allow the new Central Bank time to establish a reputation for focused and consistent policy making; also to amass sufficient reserves or support arrangements (Scotland’s share of foreign exchange reserves, public 1 sector asset sales, quantitative easing ‘ assets, oil revenues in the fund for n future generations etc).
That done, the six tests, to be undertaken by the new independent Scottish Central Bank, will signal that the Scottish economy is stable, and is likely to remain so, and has sufficient reserve arrangements to support it. It will also signal to the EU that Scotland is in a position to join the EU or Euro if it wanted to (no promises, that is up to the Scottish people, but the necessary test is passed).
This then implies a judgment on the suitability of going to another currency or a currency board; and after that an agreement on going into (or possibly a derogation,
Danish style) the Euro as part of the, by then, post-independence negotiations on readmission into the EU. Obviously it is the timing that is important here. In the two stage validation, it is the last part that gets you the ECB’s under-writing of the exchange rate that Denmark enjoys. It depends on the possibility (not more) that you will enter the Euro process (not the Euro per se) when in a condition to do so. This is a gentleman’s agreement; all new members (absent a derogation) have to agree a willingness to join the Euro process when they are in a position to do so. But it is not enforceable as Sweden’s case shows only too clearly.
Are there lessons to learn from Ireland’s currency transition?
THE transition to a new currency regime in Ireland took a broadly similar path to that now proposed for Scotland, albeit with a different timing to reflect the fact that the Irish economy was far more integrated through trade and investment with the UK than Scotland now is (not to mention differences in income levels, civil war in Ireland, the Second World War etc). So the transition took longer.
From independence in 1922 to 1943, Ireland operated with a more restricted form of unilateral currency union than that proposed for Scotland (for example, Ireland did not control her currency/ banking reserves to defend against adverse financial shocks). After 1943 Ireland switched to a fairly strictly enforced currency board, pegged to the UK pound. This worked pretty well and laid the foundation for steadily increasing prosperity and an expansion of trade and investment (principally to the US).
However with the demise of the sterling payments area and Ireland’s preparations to join the EU in 1973, this era came to an end. Ireland then joined the European “snake” currency regime which was dominated by rather frequent devaluations and revaluations, and the steady growth of previous years was lost until she joined the more disciplined EMS regime in 1979.
However the snake period and several adjustments to find her place in the early EMS years meant that Ireland was a de facto float until the EMS rules were tightened up in 1986 (the so called “hard” HMS regime). In this period the Haughey government tried at least two unilateral devaluations (1978- 82) to restore the growth and jobs enjoyed in earlier years, but to no effect. Inflation and higher interest rates killed off higher growth in the short term, and the economy, now significantly less competitive, reverted to sluggish growth, high unemployment, high interest rates and considerable financial uncertainty that proved difficult to escape.
Progress came when the Fitzgerald government was able to agree a further devaluation, but with the difference that all parties to the policy process (including trade unions) agreed not to pass on or compensate for any inflationary effects in prices and wages – and on the understanding that this all had to be done strictly within the rules of the hard EMS. This worked, and led to the 20 years of 5°/o-7% growth, job creation and investment that followed.
If there is a lesson for Scotland, it is that there may be a trade-off between stability and flexibility, but it is only in the very short run. In the medium to longer term, increases in competitiveness and productivity derived from domestic policy in a stable regime are far more powerful. This is perhaps best summed up by the Central Bank of Ireland’s former governor Patrick Honohan; the success of the movement from currency board to central bank was “in contrast to many other post¬colonial cases, (the currency board’s) demise was not followed by a rapid depreciation and slide into semi¬permanent high inflation and lack of convertibility”.
Andrew Hughes Hallett is an honorary professor at St Andrews University school of economics and member of the Sustainable Growth Commission
As a conventional Male I find the following very disturbing — But, is this the reality of Human Nature?
From — Ref 643
“The idea of a unified ‘masculine’ or ‘feminine’ personality turns out not to describe real people — It describes stereotypes to which we constantly compare ourselves and each other, but more people are ‘gender non-conforming’ than we generally realize.”
Environmental influences such as prenatal or early-life stress can feed back into this process, again altering how the brain develops.
And — Ref 646 –Gender begins with the assignment of our sex – However, a person’s gender is the complex interrelationship between three dimensions:
• Body: our body, our experience of our own body, how society genders bodies, and how others interact with us based on our body.
• Identity: our deeply held, internal sense of self as male, female, a blend of both, or neither; who we internally know ourselves to be.
• Expression: how we present our gender in the world and how society, culture, community, and family perceive, interact with, and try to shape our gender.
Gender expression is also related to gender roles and how society uses those roles to try to enforce conformity to current gender norms.
• Expression: how we present our gender in the world and how society, culture, community, and family perceive, interact with, and try to shape our gender.
Each of these dimensions can vary greatly across a range of possibilities. A person’s comfort in their gender is related to the degree to which these three dimensions feel in harmony!
Take Gender and Sexual Orientation: Gender and sexual orientation are two distinct aspects of our identity. Gender is personal (how we see ourselves), while sexual orientation is interpersonal (who we are physically, emotionally and/or romantically attracted to) — Ref 646
Read More — Ref 643
Neurologists tell us that there are Three major Human Needs
Relating to other Human Beings
They don’t mention Avoiding Boredom — this is the reason that young people are addicted to the Screen and the access to “Not Boredom”
From — Thought Crime By Roger Scruton
The proposed introduction of ‘hate crime’ marks the latest step towards the ‘thought- crime’ described by Nineteen Eighty-Four, and also observed in all totalitarian systems of government. Yet the Law Commission is pressing for this innovation, and we need to be clear about what it means.
If there is hatred in our society, it does not come from ordinary prejudices, such as those that lead rival groups of citizens to treat each other with suspicion; it stems from those who do not see prejudice for what it is, the natural response to difference, and the desire to live in a comfort zone of one’s own. ‘Haters of hate’ include the militant ‘Anti-fa’ activists, the radical anti-racists, the intolerant feminists who will not permit any utterance that they regard as ‘offensive’ to the fair sex (such as this one).
They are people who discern hatred all around them, in order to get on with the agreeable business of hating it: people who feel for whatever reason excluded from some aspect of our largely peaceful and compromising way of life, and are giving vent to their resentments.
THE TEN WORLDS — The Buddhist Vision
Much philosophy has been devoted to the question of reason versus passion, and how exercising one often means ignoring the other.
Philosophers Eastern and Western have long supposed that the human being is at war with himself, and that the fundamental conflict is between intellect and emotion. However, there’s another view of this subject, that’s well worth considering, and I want to introduce it to you here.
It’s Buddha’s idea of the Ten Worlds, and was applied most effectively to daily life by Nichiren Daishonin in thirteenth century Japan. Nichiren was a kind of Japanese Socrates. A wise and benevolent teacher, also a Buddhist monk and scholar, he got into serious political trouble by exposing the corruptions of his day – especially how Buddhism itself had been corrupted by the ruling classes, and was being abused to control and impoverish the masses, instead of enlighten and uplift them.
Every religion passes through this stage — Some remain there a long time.
As you can imagine, Nichiren made powerful enemies by telling these truths. He also made a few powerful friends. He narrowly escaped execution, and endured harsh exiles. But he survived to become a great exponent of the Lotus Sutra, which embodies, among other things, the teaching of the Ten Worlds.
These Ten Worlds are actually ten different states of mind, which you experience simultaneously. They’re all present together, like so many ingredients in a stew. But at any given moment, depending on what you’re thinking or doing, or on what’s going on around you, you’ll experience one of these states on a priority basis. It will leap to the forefront of your consciousness, and overshadow the others, but only for a while. One state changes to another, many times per day (and also when you’re sleeping). What are these states? Their names are hell, hunger, instinct, anger, tranquillity, rapture, learning, and reali¬zation, helping, and awakening. What characterizes them? First I’ll summarize each state, and afterward revisit Barry’s case showing how they interchange in practice.
Hell: Whenever something terrible or even disagreeable happens, you get upset or distraught. Any anxiety, fear, or other dis-ease can be hellish. Diseases like chronic depression, or the depressed state of bipolarity (manic depression) are also hellish. So is the boss from hell, the job from hell, the date from hell, or the marriage from hell. People consumed by hatred are in hell. Whenever we experience pain or suffering, we are in hell. It’s the worst state to inhabit, beyond reason and passion alike.
Hunger: This doesn’t refer to physical appetite, but to craving. People who are obsessed have this hunger, as do people who are addicted to alcohol, drugs, or other things. Many obese people have a terrible hunger – whether for meaning, purpose, love, or affection in their lives – which they try but fail to satisfy with food. They eat constantly, yet remain hungry. These kinds of hungers are extreme (or unnatural) passions.
Instinct: These are your animalistic appetites and drives, given to you by bodily nature. Normal needs for air, food, drink, sleep, love, affection, excretion, and sex are all instinctive. They are not learned. No one taught you to feel thirsty, tired, lovesick, or horny. You don’t need a clock to know when to eat; your stomach tells you. Our animalistic appetites are normal (or natural) passions.
Anger: This means more than losing your temper. Some people seem constantly enraged; others, intermittently cranky. Others still become irritated by a given stimulus, whether a car alarm on their street or the odour of cheap perfume (or no perfume) on the subway. Still others seem bent on some crusade, and are perpetually and aggressively proselytising their agenda, whatever it is. Still others are always argumentative or hypercritical. Yet others are arrogant or sadistic. These kinds of angers are unreasonable and exaggerated passions.
Tranquillity: This is a peaceful state in which your mind is un-perturbed, like the unrippled surface of a pond on a perfectly calm -day. You often attain a tranquil mental state after strenuous physical exertion, or after a heavy meal, or during meditation, or on a long drive, or when daydreaming, or in some phases of sleep. Nothing in particular is disturbing you, nor are you disturbing yourself. Tran¬quillity is neutrality, and absence of passion and reason alike.
Rapture: This is a state of sudden happiness, or even ecstasy. Perhaps you received a raise or a promotion at work. Maybe you got a personal makeover, or just bought your dream home. Perhaps you proposed and she said yes, or he proposed and you said yes. Maybe your team won a big game. Perhaps you got a pleasant surprise. Maybe the medical test results came back negative and gave you a new lease on life. Nothing feels better than rapture, while it lasts. It is the most joyous passion, but for that very reason it cannot last.
Learning: In this state you are exercising your cognitive skills, flexing your intellectual muscles. You might be learning a new language, a new concept, a new piece of music, a new game. You might be cramming for an exam, researching a term paper, or surfing the Web. You might be catching up on current events or planning a trip. Whatever you’re up to, your thinking mind is engaged and in high gear. You are a reasoning being.
Realization: Realization means discovery, creativity, invention, and connection. Suppose you are studying geometry and have just learned the relation of the hypotenuse of a right-angled triangle to its other sides. That theorem was originally Pythagoras’ realization. Similarly, Shakespeare realized Macbeth, Bach realized The Well-Tempered Clavier, Einstein realized that E = mc2, and Salk realized the polio vaccine. You have surely realized many things yourself. Plato realized that people can and do realize ideas that others have previously realized. Jung realized that new realizations often take place simulta¬neously. Realization is reason inspired by creative passion.
Helping: I could not be writing these words, and you could not be reading them, without a lot of help from others. Parents, teachers, coaches, and caregivers are helpers. So are food producers and book producers. Fire-fighters, and all who risk their lives for others, are helpers. You are surely a helper too, at least sometimes. The helping state of mind is essentially a giving one. In its higher aspects it seeks nothing in return, aiming only to replace others’ dis-ease with ease. Helpers of this kind are called “bodhisattvas.” Their – and your – ultimate purpose is to help others awaken more fully. They – and you – are lamps that light the Way. Helping is reason motivated by compassion.
Awakening: Many people walk or talk in their sleep. Not many can drive that way, at least not for long. Whatever you can do in your sleep, you can do better awake (except sleep itself). The other nine worlds are partially awakened states of mind; some more so, others less. The world of full awakening is Buddha’s state of mind. The Lotus Sutra teaches that you are already a Buddha, but you may not fully realize it. This is the only state in which even pain and suffering are born with ease. It is immune to hell. It is the best state to inhabit. And nothing prevents you from inhabiting it, except your other states of mind.
THE WHOLE TRUTH
Now it’s time to let you in on a little secret. I have told you the truth about the Ten Worlds, but not the whole truth. You see, I introduced them from the standpoint of the traditional debate on passion versus reason. As we saw earlier in this chapter, most philosophies, Eastern and Western, have generally sought to conquer passion and extol reason. Passions are portrayed as bad, reason as good. Nichiren’s teachings, which are thought to represent an advanced teaching of Buddha, say something quite different. With the exception of the fully awakened state, each and every one of the other nine states of mind can give rise to both helpful and harmful consequences. This is very important to bear in mind – whichever state you’re in. Let me give you some examples.
We know that hell is bad. What good can come of it? For one thing, great works of art can emerge from a mind in hell. Van Gogh is one example, Dante another. Closer to our times, Jim Morrison (of the Doors) and Jimi Hendrix are other examples. Beautiful painting, literature, poetry, and music can come from hell. Also, many people who admire and appreciate such works become grateful that their own hells are not so bad compared with these.
We know that hunger (as in craving) is bad. What good can come of it? For one thing, great social or political reforms are often brought about by leaders who hunger or thirst for justice. Nichiren himself was one good example, as was Martin Luther King Jr. One can also crave truth, as scientists sometimes do for years until they experience realization. Kepler and Pasteur are two among many examples. If such hunger is subordinated to a higher cause and remains uncor¬rupted by anger, it can be a means to a worthy end.
We know that the debate on instinct is still raging. For example, look at the vast variety of attitudes concerning sex, one of our strongest instinctive drives. Some cultures are open and natural about its expression; others are freaked out and repressive. In the Ten Worlds teaching, the instinctive state of mind is neither good nor evil: What really counts is what you decide to do with it. If you express your sexual desire through love with a willing (and not otherwise committed) partner, that’s good. If you go out and rape somebody, that’s evil.
We know that anger is generally bad. What good can come of it? Sometimes we need the force of conviction to demonstrate our seriousness, or to take a stand. It may be necessary at times to be adamant or even vehement in making a point or serving a cause. Suppose you want to make your child stop playing with matches, but he is too young to understand the reason why. If you convey just enough emotional displeasure when he does it, he will sense your emotion and will stop doing it – either to please you or for fear of your displeasure. You are not angry with him, but you need to protect him from himself. Controlled passion can be helpful, as when used to avert harm, and can therefore be good.
We are habituated to believe that tranquillity is generally good. What ill can come of it? Some people are tranquil to the extent of procrastination, laziness, or sloth. That’s too much of a good thing. Others are tranquil to the point of apathy, so that if something actually needs to be done, they won’t get involved. Recall the famous case of Catherine Genovese, the unfortunate woman who was as¬saulted and stabbed to death in New York City in 1964, while thirty-eight of her neighbours heard and watched from their windows, yet none intervened or even called the police. Their tranquillity – in this case apathy – probably cost her life. So tranquillity can be bad at times.
We believe that rapture is wonderful. What ill can come of it? One always does: rapture ends, and usually ends in hell. The greatest love affairs are inevitably the most tragic, from Antony and Cleopatra in ancient history, to the medieval legend of Tristan and Isolde, to Romeo and Juliet in fiction. Creative genius is also rapturous, and often meets the same hellish end. When Ernest Hemingway could no longer write, he killed himself. After Maurice Ravel suffered a stroke, he could still “hear” his compositions in his mind but was unable to play them or write them down. He lived four years in that hell, until he died. Most people don’t experience too much rapture, which is just as well: Most could not afford the steep price of its ending.
We believe that learning is generally good. What harm can come of it? One can learn helpful or harmful things. If you learn medicine, you can heal others and alleviate suffering. If you learn terrorism, you can harm others and engender suffering. Even normally good things, like medicine, can have bad applications. For example, Nazi doctors. performed barbaric experiments on human beings. In our times, computers are indispensable tools, but vital facts about people learned through the Internet can result in identity theft. There are many ways in which reason can be applied to bad ends.
We believe that realization is generally good. What harm can come of it? As with learning, realization can backfire. Nuclear energy can be used to generate electricity, which is good unless the reactor core melts down, as almost happened at Three Mile Island and did happen at Chernobyl. The discovery of nuclear energy also allowed nuclear weapons to be built, which is a persistent problem that may yet revisit us. The ancient Chinese discovered gunpowder, and invented fireworks. Early modern Europeans discovered gunpowder, and in¬vented firearms. Sociopaths are calculating beings, using their inven¬tive intelligence to inflict savage harms. Creative reason cuts both ways.
We believe that helping others is generally good. What harm can come of it? A friend of mine gave his daughter a tidy sum of cash as a wedding gift, not knowing (at the time) that she and her husband were addicted to cocaine. Guess what she bought? A road to hell, paved with her father’s good intentions. On a large scale, consider the impact of social welfare. While compassionate governments should provide a “safety net” for their citizens, many families in developed socialized nations have been collecting such benefits for generations: They have lost their incentive, initiative, and confidence. This is not good for them. So if we give inappropriate help, it can turn out to be harmful.
Finally, awakening is always good, because it does not take place in the presence of a harmful thought or deed.
So the lessons of the Ten Worlds reform and resolve the ongoing debate about passion and reason. The proper goal for human beings is not to eradicate passion and elevate reason. The proper goal is to cultivate only the beneficial aspects of all your possible states of mind.
That way, whatever states manifest, you will guide yourself toward the best possible world.
Politics is the means we have developed to deal with the complexities of Human Nature.
Tory values are based on: — from an editorial by Fraser Nelson
• The lowering of taxes,
• Being strong on defence and
• Keeping the streets safe
From Michael Fry in the National:
Adam Smith set out 250 years ago what he believed the to be a Governments’ indispensable tasks:
• One was the administration of justice, without which a society could not function.
• Second was the defence of that society against outside attack.
• Third was a function Smith called police, though he did not mean police in the modern sense.
In the West there are two distinct political aspirations:
“Capitalism” refers to a political and economic system that was developed in Europe and America during the Enlightenment. It is characterized by private ownership of property, rather than state control. More fundamentally, it rests on the Enlightenment principle of Individual Rights, in which the unit of moral and political value is each individual. As the American philosopher Ayn Rand explains this,
Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned. The recognition of individual rights entails the banishment of physical force from human relationships: basically, rights can be violated only by means of force. In a capitalist society, no man or group may initiate the use of physical force against others. The only function of the government, in such a society, is the task of protecting man’s rights, i.e., the task of protecting him from physical force; the government acts as the agent of man’s right of self-defense, and may use force only in retaliation and only against those who initiate its use; thus the government is the means of placing the retaliatory use of force under objective control.
Socialism is a range of economic and social systems characterised by social ownership and democratic control of the means of production as well as the political theories and movements associated with them. Social ownership may refer to forms of public, collective or cooperative ownership, or to citizen ownership of equity — a sympathetic version, and the following —
Socialism is a political and (derivatively) economic system in which the individual has no independent existence, and morally exists only to serve the collective as represented by an omnipotent state.
The context is the State and the Nation:
• A Nation is an aggregate of people united by descent, history, culture or language, inhabiting a particular country or territory.
• A State is a nation or territory with an organized political community under one government.
Sovereignty is the soul of any state because sovereignty means the ability to rule itself.
The Rule of Law — A state uses its police power to enforce a set of laws while there is no nationwide police force
He notes:– Capitalism is the only system that is capable of delivering mass prosperity — but it tends to go awry.
Once every few decades it veers off track and requires active public policy
Paul Collier advocates ” One-Nation Conservatism”
A brief recent history:
In the 1930s, no political party rose to the challenge of mass unemployment, which was addressed as an inadvertent by-product of rearmament.
During the 1980s, a tempting new eco¬nomic doctrine emerged in America: mar¬kets were sacrosanct, and government regulation was impeding them. High- powered incentives, linked to monitored performance, would be the carrot inducing CEOs to get tough.
So — A competitive product market, combined with a competitive finan¬cial market, would provide the stick, forcing firms to be efficient: only the most profit¬able ones would be able to attract capital, while badly performing firms would face the threat of takeover.
A competitive labour market, combined with reduced access to welfare benefits, would get everyone into a job.
So — Open borders for trade and migration would benefit everyone.
Ethics became redundant: self-interest would drive society upwards. In this brave new world, business became the hero, government the villain.
The Conservatives embraced it with ‘roll back the state!’
In the 1990s, even Labour embraced a diluted version, becom¬ing ‘intensely relaxed’ about people getting filthy rich.
So — The consequences for social division were starting to look ugly well before 2008 when deregulated financial markets blew up the economy.
Reversing long trends, from the 1980s the provinces diverged from the metropolis; the educated from the less-educated. British society, a dense pattern of reciprocal obligations, was being torn apart.
Yet there has been little serious rethinking in either party.
Labour became so intellectually lost that it got hijacked by Marxists (A cheap Retort by Collier) , shunting itself into a cul-de-sac from which it will be difficult to escape.
However, the Conservatives flirted with good ideas:
• David Cameron with the Big Society,
• Theresa May, less specifically, with ‘Burning Injustices’.
However — neither narrative became dominant.
The concept of the Big Society was fatally contaminated because it coincided with reductions in public spend¬ing and, more especially, with the official narrative of ‘austerity’.
Even an incompe¬tent political opposition managed to present the Big Society as a deliberate obfuscation of spending cuts: ‘The government is going to cut taxes on the rich and hit the poor, but we needn’t worry about you because you’re going to help each other.’
As for ‘burning injustices’, it rapidly transmuted into ‘we’ll take your house off you if you get Alzhei¬mer’s’: possibly the most ethically offensive and politically inept message ever proposed during an election campaign.
The intellectual comfort zone of each party retreated into equally unviable nests: the Conservatives wanted nation-without- state; Labour wanted state-without-nation.
Meanwhile, ordinary people facing new anxieties seized their opportunities to muti¬ny.
In Scotland, they voted for the SNP; in England for UKIP, Brexit and Corbyn.
Given the travails of Labour, recovery of the intel¬lectual confidence of the Tory party has become essential for the country.
So what are the options facing the Tories?
The American right was lured by libertarianism: ‘neither state nor nation’.
This is manifestly ridiculous: I tell my libertarian friends that they do not need to wait in America pining for nirvana.
They can breathe the air of freedom from govern¬ment right now by moving to Somalia.
The libertarian agenda
• Appealed to Silicon Val¬ley,
• Naively enthused by Bitcoin’s promise of money without government, and
• Facebook’s mission of connecting everybody to every¬body.
• Bitcoin is a Ponzi scheme burning the less-educated latecomers;
• Facebook is pro¬ducing echo-chambers and abuse.
• The agen¬da is irrelevant to the anxieties of ordinary people. For them, ‘stand on your own feet’ sounds more like ‘fall on your own face’.
As with Labour’s ‘intensely relaxed’ narrative, it left the Republican party vul¬nerable to hijack.
The GOP response was a populist. ‘Neither state nor nation’ that could never be a serious agenda for the Conservative party, despite its appeal with¬in the regulation-averse City, and Sajid Javid’s admiration for Ayn Rand and tax cuts.
Turning the Conservative party into the Libertarian party would be the royal road to political suicide.
So — The remaining choice is state-and-nation.
Human Needs are complex, explored in Literature, TV, etc, giving understanding, as well as entertainment.
In simple terms they are::
These are (Reference) —
1. Biological and Physiological needs – air, food, drink, shelter, warmth, sex, sleep.
2. Safety needs – protection from elements, security, order, law, limits, stability, and freedom from fear.
3. Social Needs – belongingness, affection and love, – from work group, family, friends, romantic relationships.
4. Esteem needs – achievement, mastery, independence, status, dominance, prestige, self-respect, and respect from others.
5. Self-Actualization needs – realizing personal potential, self-fulfilment, seeking personal growth and peak experiences.
Clearly many are Complex Needs, and many also particularly apply to certain individuals and in certain circumstances.
In his book, “Hardwiring Happiness”, by Rick Hanson re-grouped these Needs, and related them to brain functions, as follows:
As the brain evolved, so did its capability to meet our three Core Needs, each with an operating system to realise the Need , which are —
• Safety — Avoiding harms
• Satisfaction — Yielding Rewards,
• Connection –. Attachment to others
Each of these brain operating systems has alternative modes of operation:-
• Responsive — If the Core Need is basically being met = the Green Setting
• Reactive — If the Core Need is at risk — the Red Setting
See Blog on Human Nature
Theresa May announced £1.7bn extra investment in transport links outside London – but the entire fund will focus on boosting the UK’s city regions — Boosting only the Cities
The result is that New service jobs increase in the cities; old manufacturing jobs decline in the towns. Shiny new shopping centres drive city centre regeneration — but neighbouring small town markets, shops and banks close or move online
The Nub — The essence — the core — the nub of the story
Let’s start with the 2008 triumph of the simplistic enterprise called whatever!
Driven by —
The Lehman Brothers’ bankruptcy “unleashed chaos”, but it also changed the financial system.
The questions now are — did it change it enough — and could it happen again?
Philip Aldrick in The Times:
• The short answer to this question is “No”.
• The one part of the system” that has been fixed is the liquidity regime.
• The bad news, though, is that many of the same pre-crisis dynamics are still with us.
• We have spent a decade fixing the system but evading the problem, which was always about cheap credit and too much debt.
Tommy Stubbington in The Sunday Times:
• A reckoning is coming
• The crisis unleashed an unprecedented response from central banks and policymakers, who slashed interest rates to near zero and pumped out trillions of dollars in quantitative easing to stave off meltdown
• Most experts agree these efforts were successful — in the short-term.
• But after ten years — with bucket-loads of cheap cash inflating asset prices and fuelling risky borrowing — there are worries that the response to the last crisis might trigger the next.
• Developing countries have gorged so freely on cheap credit that the Bank for International Settlements estimates that US dollar debt in emerging markets doubled to more than $ll trn in the decade to 2017
• Now central banks have reverted to shrinking their collective balance sheet
• It is no coincidence that emerging-markets currencies and bonds have gone into free fall
Will Hutton in The Observer:
• Even the limited reforms set in train since 2010 have not been fully implemented.
• Worse, the essential moral bargain remains in place.
• Finance can do more or less what it likes.
• We’re told that regulators are “more alert” and that banks are better cushioned by capital.
• Yet a cursory glance at markets shows how febrile they are – and how rich the pickings for those prepared to take risks.
• Note, too, the “shaky foundations” of the new wave of financial products, notably exchange-traded funds offering risk diversification
• All that is required is for, say, Turkey or Italy to default on their debts, an ETF to become distressed, or a sequence of Chinese banks to fail (all too imaginable).
• The impact would radiate across the network as it did in 2008.
Who was to blame?
• Primarily, the financiers
• Deregulation was also to blame.
• In 1999, the US Congress had demolished the barriers between investment and commercial banking, allowing high-risk investment with deposited money.
• Regulators also allowed banks to set aside too little capital to absorb losses.
• But the wider econo¬mic backdrop lulled nearly everyone into a false sense of security.
• The Great Moderation – the period of low inflation and stable growth that began in the 1980s – made the financial world seem less risky.
• The global savings glut — the surfeit of savings in, for instance, China and Germany – meant too much cash was chasing too few investment opportunities. All this encouraged risk-taking.Primarily, the financiers
What were the long-term effects of the financial crisis?:
• They were almost incalculable. Assets worth more than $2trn were written down as a result
• The value of growth lost was much greater