…in the UK that is.

I will take democracy to mean “implementation of the policies of the population at the government level”.

Some might think that democracy is a kind of ideal pinnacle that we’re systematically working towards, or at least someone is, and that I am just setting my threshold too high. I don’t see “implementation of the policies of the population” as futuristic ideal form of society beyond our practical abilities, do you? It’s an obvious starting point not an ambitious end point. In any case I will point out some factors that, to me, show that our society is not only way off that definition but shows no evidence of progress toward it, and in some cases has moved away from it in our lifetime.

1) The Electoral System is a Mathematical Joke

At school we were taught to “always leave rounding to the end!” At least, I was. Maybe it’s different at Eton. If you are doing some kind of arithmetic procedure you should never round up or down until the very end of the sum. This is because rounding introduces errors, errors that add up. Our electoral procedure ignores this basic maths lesson and rounds up or down at every constituency; creating rounding errors that add up. The resulting range of error is so big that the election result is effectively irrelevant. We may as well roll some dice.

Constituencies hold, by convention, about 70 000 people. The last election’s turn out was about 50% so to secure a clear majority in a constituency only about 16 000 votes are needed (assuming they need half the votes cast, which is an over estimate). The commons is about 650 chairs so 326 seats is a majority. That means that, in ideal conditions, a party can get a majority with 5.2 million votes. On the other hand, imagine that a party gets 5.2 million votes but they are all won in the minimum number of constituencies. With full turn out (in those constituencies alone) that gives them just 74 seats, meaning that 12% of the population’s votes can secure a party anything from 11% to 51% of the commons depending on turnout and geography.

Of course these are two extremes but that’s the point, the range of error is gigantic. Although, interestingly, it’s not quite big enough for small parties to quantum leap to the top and threaten the two main parties, but it does raise the serious question: are our two main parties are Heads and Tails?

Incidentally, there has been talk over recent years of the House of Commons being too big (under the banner of being too expensive). Making the Commons smaller would make this rounding error even worse because constituencies would be bigger.

2) The House of Lords

Every act passed by our parliament starts with the following (emphasis added):

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:-

For a piece of legislature to be passed, that is, for a law to be enacted, both the Lords Temporal and Lords Spiritual must give consent [1]. The Lords Spiritual were given their position by virtue of being in particular positions in religious orders. No democratic process there. The Lords Temporal used to be people whose ancestors were made Lords by the Crown for some arbitrary reason, winning battles or whatever. Nowadays people can be made “Life Peer” without any democratic process. Once made a Lord it’s permanent. You can’t even retire. The only way to get out of the House of Lords is to assume a meaningless title that they reserve for that purpose that has no obligations.

Earlier I mentioned talk of the Commons being too big. The House of Lords is bigger than the Commons and I don’t think there is talk of it being reduced in size.

3) Manifestos Are Not Binding

No-one knows what MPs are really supposed to do. They have no job description. They are supposed to represent their constituency but they are under no contractual obligation to do that at all, and party politics messes with that commitment because they are expected to go along with the party position. There is no formal process to make sure MPs actually do whatever their job is supposed to be, or even what they say they intend to do. There is also very little actual tracking of what MPs do. The don’t publish time-sheets (a basic concept in all project management). They can have meetings with lobby groups often without any mechanism for is to find out. Similarly parties are under no legal obligation to even enact their own manifesto. Not only are they free from such obligations, they aren’t even obliged to tell anyone the truth about their activities or whether their policies are having the claimed effect.

The severity of this deviation from democracy is made greater by the fact that there are plenty of other situations in which people are legally required to tell the truth. The lying of politicians is taken as another one of those laws of nature that we have to live with.

MPs only have to get us to believe that they will enact our policies but once elected they are free to do whatever they can get away with and lie to our faces about it. They can deviate from their own promises and face no discipline except the threat of losing their seat (which doesn’t apply to more than half of parliament), and they can avoid losing their seats using the same non-democratic tactics mentioned. No one is tracking whether MPs parliamentary voting is reflective of their constituencies’ wishes or just their own ideology or career strategy or personal influences.

In a real democracy a politician would have to agree to a binding policy document and would be removed the instant they deviate from it. Unfortunately we have been trained to believe that democracy means accepting vague non-binding manifestos and that once we have elected someone removing them (for not delivering it) would be anti-democratic!

You might point out that ministers can’t enact laws on their own. Even with a majority there is no guarantee that a parliamentary vote will go the government’s way so it is unfair to expect MPs to always be able to enact their own manifesto. This is true but this only applies to legislature, and a majority government will likely get it’s own way with that. It raises the question though: why promise things you don’t ultimately control? The answer: because they can promise whatever they want. It’s not binding.

4) The Economy Is Not Democratic

If democracy involves consideration of factors that affect our lives then modern democracies have a blind spot: the economy. The general principals that govern the economy affect all of our lives but could not be further from democracy.

One of the reoccurring splits in modern politics is between left and right, using various names, which often reduces to a single question: should the economy be democratic? Liberalisation of markets, corporatisation, limited liability, property rights and shareholding are all attempts to make the economy less democratic. Labour unions, co-operatives, legislation, the modern public sector are attempts to make the economy more democratic. Socialism itself is the principal that working in a company gives you the right to control it.

The number of people that control the majority of the economy is tiny, and they answer to no one because the idea of real democracy is so alien to us that we never even consider it an option when it comes to the economy. The very use of the word “economy” has become a strategy to present it as a force of nature that just is with internal rules that just are, not something that even qualifies as being considered a democratic matter.

We can debate whether the economy should be democratic, but we honestly can’t claim that it is.

If you work you almost certainly do not control the company for which you work. You give your finite time on earth to a project, there is a good chance you give more time than the owner, and yet you probably have no say at all over anything that that company does. Sure you can influence, of course the owner(s) might chose to listen to you, but the legal reality is that you have no control over how your efforts effect with world. Anyone can be fired/hired without you being consulted. How the company’s resources are used, who they sell to and buy from, how they treat people, even whether the company actually functions, are all beyond your control.

Here the deviation from democracy goes beyond practice. The religion of the market has made it undetectable at a psychological level.

5) The Political Ladder

It’s important to make a distinction between how you play a game and what the game is. Some things can be achieved by playing the game differently, but some things cannot be achieved because of the way the game itself is designed. The game has to be changed.

A person has practically zero chance of becoming an MP, let alone a minister, unless they affiliate with an established party. Parties have practically no chance of forming a government without serious funding, either directly or help-in-kind like having a media empire not destroy you, or having a few shareholders not threaten to destroy an industry when you get in power.

The process of going from child to cabinet minister ensures that only people with specific beliefs and ideologies get anywhere near their final goal. This isn’t to say that politicians are being bought (they are) but rather that only the right personalities are allowed to climb the ladder. Who is designing this screening process? I suspect that this isn’t entirely by design, for example, high ranking MPs having psychopathic levels of manipulative skills and emotional detachment is more likely a happy side-effect than an intentional strategy, but who knows?

Whether you accept that this filtering process is as I describe is one thing but if you think that what I have said is some kind of conspiracy theory then consider that three quarters of our cabinet are millionaires. Or consider that the government’s perpetual commitment to subjects like Science, Technology, Engineering and Maths and then note how few cabinet ministers come from any of those backgrounds. The discrepancies we see occurring in a democratic process would be an astronomically unlikely coincidence.

Remember that none of this is nature, these are systems created by us either intentionally or via absent-mindedness. The fact that many of these things are not even open to discussion raises serious doubts about whether we live in a democracy. The thing we refer to as our “democracy” is really a set of systems that exist to make us believe we live in, or are progressing towards, democracy.

[1] There is an exception to this in the Parliamentary Acts but they have only been used a handful of times.

If you watched the party leaders’ debate you can see quite clearly how the parties fit on a spectrum. In political theory that spectrum would be the left-right spectrum, which is probably the case, but the left-right spectrum is generally to do with value judgments about style of governance. Traditionally it meant bottom-up versus top-down, dating back to the masses versus land owners. More recently it was more to do with being ‘progressive’ or ‘liberal’ versus ‘conservative’. Now if you are in favour of market regulation you are a liberal, which makes no sense. Anyway, whatever those words are supposed to mean they ostensibly referred to subjective ideas about approaches to governance.

More and more the spectrum we see seems, to me at least, to no longer be about abstract value judgments but about statements of facts that could be refuted or verified. The establishment holds to a dogma because they got to be the establishment thanks to the funding of those who benefit from that dogma. If the right of this spectrum was pro- and the left anti- then on this spectrum the Conservatives, the Liberal Democrats and UKIP are far-right. The green party somewhere on the far-left (I get the impression that they don’t accept this dogma at all). Plaid Cymru and the SNP seem to be somewhere towards the left. Labour is in a compatibilist position; trying to be in both groups.

The problem is that the dogma has such strong backing that to directly disagree with it in public would cost any political party too much, they’d be seen as mad, and the establishment parties would use the opportunity to attack that party and destroy some competition, rather than to allow any reality to leak into the political discussion. It is a monster created by the political class that even they can’t control.

The dogma is a series of lies concocted to stop the masses revolting against huge disparity of wealth and power. I think people understand and recognize this distinction but in most cases have head their heads filled with nonsense about how an economy functions and so can’t describe it explicitly, the words they would use just don’t fit together properly, but people can tell the ‘establishment’ parties from the outsiders along exactly the same lines as those above. People are starting to see austerity as a kind of con, but lack the economics theory to fully describe the nature of the con, although they can get, in most cases, very close. The dogma has the useful property that it aligns with common sense, and so is hard to fully disregard, but if you look at the details it doesn’t make sense at all.

The dogma is an assembly of political / economic theories that allow politicans to have prolonged discussions about the NHS, immigration, joblessness, infrastructure in which they make patently ridiculous claims, that are demonstrably false, and not just get away with it but earn political capital for saying it. They have to feed to monster. I’m not talking about cherry picking statistics to fit a preferred narrative, that’s bad enough; I’m talking about explicit and absolute claims about fundamental aspects of how our country’s economy functions that are obviously false.

In 2008 the world economy was almost destroyed by the actions of a tiny group of people called the financial sector. It followed an almost worldwide shift in policy as our best and brightest economists ensured us all that their Efficient Market Hypothesis showed that opening up our financial systems to the market by deregulation they would work better for everyone. The banking sector profits by getting people into debt, obviously, so any idiot can see what happens when you let them do that: they generated more debt than there is means to pay it back. The interlinked nature of and speed of trade between banks meant that once confidence in those schemes disappeared it collapsed practically instantly. Those economists watched the debt grow and, even in the last minutes, ensured us that such a debt can have no macroeconomic effects. The more liberal economists argued that markets know best while the right wing economists argued the same and that we should be more mindful of ‘government debt’, a message that became a strong part of the dogma.

If you cast your mind back to 2005-2008 you will remember all of those ‘consolidate your debt’ schemes and mortgages with tiny deposit requirements, these were part of a huge Ponzi scheme. Banks had found a way to profit from issuing mortgages even if the mortgages could never possibly be paid, so called toxic assets. They also subscribed to a method for measuring risk (based on the idea that financial assets can be combined to improve their yield while not aggregating their risk proportionately) that significantly undervalued it, bloating their confidence.

After the crash happened there was a kind of quiet chaos. The top 1% had to scramble to protect their fortunes. The newspapers ran with stories telling us what had happened in black and white: bankers had almost brought the world economy down.

When the dust settled the establishment kicked back in and stories of banking system’s economic crimes and the question of regulation almost disappeared from the press and were replaced with a new narrative: it was the benefits! The problem was clear: private debt had blown up but the establishment can’t tell people not to get into debt. So a strange, and in my opinion intentional, chimera was created. The word ‘debt’ was turned into a Frankenstein’s monster of mish-mashed econometrics. Was this monster our credit card debts? Or our mortgages? Something to do with our pensions? Was it the same as the government debt? We were told we were “living beyond our means”. It had something to do with government spending…right? Sacrifices had to be made to the Gods of the Markets else they would send their monster to destroy everything. At least when ancient civilization sacrificed people to the gods it didn’t make things worse. This monster’s confusing anatomy allowed any discussion of the 2008 crash to easily transition into how bad government spending is. The Conservative Party pushed the benefits story for maybe a year but it started to backfire because most of the population are on benefits. As, it would turn out, are most of the Conservative party, but that doesn’t count. Half of benefit claimants are in work. Also, most benefits are paid to old people. The story was alienating the party’s popular support so it had to be replaced with a new narrative: the monster is attracted to immigrants! This was pushed through the news media and backed by the Conservatives. Remember the ‘Go Home’ vans?

The immigrant story was perfectly in sync with the relatively unknown UKIP ideology. The government was now funding UKIP’s campaign; a strong factor in their rise. Later the BBC would join UKIP’s funding stream by giving bewilderingly disproportionate and free coverage practically ever day, while completely ignoring other comparable parties. UKIP would, without hint of irony, complain of “liberal bias” and would later spin this to imply that their coverage was proof that they are the voice of the masses, rather than that they were popular because of the efforts of the Conservative party and the BBC’s bad coverage choices.

Seven years later political leaders are having discussions about how to fix the economy while, as far as I can tell, nothing has been done to stop a repeat of 2008 and all of it’s effects (banks are just waiting for confidence / recklessness to return), which are all the things the government is taking responsibility for fixing. The crimes of the financial sector were whittled down to the real but minor issue of banker’s bonuses while the story of the monster is still wreaking havoc. Worrying about banker’s bonuses after 2008 is like worrying about the cleanliness of an axe murderer’s axe, but even that issue hasn’t been resolved. Meanwhile we are seeing the return of tiny deposit mortgages and weird debt schemes, while the financial sector functions along the same governing principals as in 2006. The problem of affordable housing means that if banks start to offer low deposit mortgages this is seen (and I’m sure would be claimed) as a cost of living victory, a way to get on the property ladder, rather than the onset of another debt bubble. Every time a political party does whatever it can to claim an unjustified victory over something, even if it seems harmless to do so, our political domain moves one step further from reality and the dogma gets stronger.

‘Balance’ had to be the most overused word in the Party Leader’s debate although most of the time it wasn’t clear what had to be balanced with what. The dogma holds that the government must balance it’s books, the debate had this idea built into it. A youngster in the audience demanded to know how leaders would balance the books. Is that really what troubles the average 15 year old? Those books, wherever they are, have never been balanced. In fact if they had to be unbalanced to exist.

The Conservatives, the Liberal Democrats, Labour and UKIP all accept that the books must be balanced. Plaid Cymru and SNP seem to hold that the books must be balanced but will tend to balance themselves if the government prioritises properly. I’ve seen no evidence that the Greens accept the need to balance the books, so I’m beginning to think the don’t subscribe to it, but they are being very careful, for reasons mentioned above, to not say it explicitly.

The story is that the government must borrow off someone if it wants to fund spending when it can’t gather enough in taxes. The simple fact that the treasury is the only entity in the universe that can create pounds fundamentally contradicts that story. If the government is to get pounds off anyone it had to have given them those pounds in the first place. When the creator of pounds creates new pounds we call that the “deficit.” It’s pretty easy to see that if the thing that issues a currency issues it they are by definition running a deficit, although I’ve had discussions with people who have read a lot about economics and can’t get their head around that. If the treasury created pounds and kept them all they wouldn’t run a deficit but would have issued zero pounds. If they were getting back as much as they issued then they wouldn’t be issuing any, right? Basic accounting. 1 – 1 = 0. When someone else tries to create pounds we call that “counterfeiting” and throw them in prison.

We have been trained to think that it is ‘common sense’ that the government must borrow pounds in order to spend more than it taxes but it is more fundamental common knowledge that the treasury creates those pounds. And what’s more it’s actually true.

That same ‘common sense’ makes us all think that more people can be employed if people just work harder. If we work harder we will earn more money that we can spend on hiring more workers… but if everyone is earning more, who is paying for it? For you to take more someone else has to give more. If the money supply is fixed how can everyone take more? Again, more fundamental common sense applies. One company’s success of increased revenue is another companies failure of increased expenditure. One person’s saved spending is another person’s lost revenue. It doesn’t matter how clever, enterprising or industrious we are, or how strong our work ethic is or how big big society is. 1 – 1 = 0.

More work-hours means more money in circulation. So how can money get into circulation?

First you have to see that pounds are a type of money, but there are other types. Anyone can create money, but in most cases not many people would accept it. The trick of banking is that they don’t need anyone else to accept it. Each bank keeps it all to itself. If you have a pound coin in your pocket that was created and issued by the treasury without a doubt. If you have a pound in a bank account you don’t really have a pound, you have an account containing your banks’ own denomination of money. The bank promises a 1:1 exchange rate with the pound. When you move money between accounts in the same bank the bank just has to alter it’s own internal records. Banks each have an account at the Bank of England (BoE). If you transfer money to an account in another bank, since your bank can’t alter another banks accounts, they have to transfer pounds to that bank before it will update the other persons account. They ask the BoE to transfer pounds from their account to the other bank’s account. BoE accounts contain BoE money, and because the BoE and the Treasury are branches of the same thing, they can always give you 1:1 exchange for pounds, so those accounts contain, by definition, pounds.

The economy tends to want to expand if it can. It wants to do more. Whether what it wants to do is beneficial is, of course, another matter. If expanding requires new labour (which isn’t guaranteed but generally the case) it needs to put more money into circulation. There are only three ways from which that new money can come: from the treasury, from savings or from banks. Note that I said ‘money’ i.e. not necessarily pounds. If it wants pounds then the banks can’t help.

If the government is obsessed with Austerity or Monetarism or Fiscal Responsibility or whatever the current looters call it then the government is actively trying to stop flow of new pounds from the treasury into the economy. In this situation the economy can only get money by either raiding savings or asking banks to lend. Depleting savings at an economic level is probably a terrible idea for obvious reasons, it’s like a starving animal burning off all of it’s fat; it’ll keep it alive but a single bad winter would kill it. The other option is bank lending.

Banks lending is a delicate game. It can be perfectly benign and useful or cataclysmically destructive. If those that borrow can afford the interest payments and the shareholders profiting from that interest are spending the money back into the economy (i.e. it is circulating wages to shareholders to wages etc.) bank lending can expand the money supply in a stable way… to a limit. If this creates no social problems then it’s all win-win. If the banks generate more debt than the economy can service then the process itself demands more money beyond what the economy can create internally: i.e. pounds. If the treasury refuses to intervene and supply those pounds (or it supplies them at too low a rate) then there will probably be a serious credit crunch or crash. Further, austerity rules will actually force the government to be part of this process, going to banks to borrow, rather than act to remedy it.

So if the bank’s lending practices are kept within the obvious limits of not creating debt beyond what the economy can sustain or destroying the social order it can be stable. There is, however, a far simpler and less toxic way of getting money into the economy: the treasury can just issue pounds.

The treasury can do that in three ways: give it, spend it or pay interest. It can also lend it but that is only short term because, assuming it charges positive interest, it will get more back than it lent, so the net is negative (unless it just spends the interest earned back out). The government gives pounds away through things like benefits and tax breaks. It spends it, obviously, when it buys stuff. It pays it as interest to anyone that is holding treasury bonds, which are bought when people open savings accounts, which is why talk about government debt is mostly nonsense. All of the above add up. If they add up to a deficit then the government is a net issuer of pounds.

Which of these seems like the best approach to getting pounds into circulation? The good thing about spending is that it kills two birds with one stone: it gets pounds out into the economy that can be re-spent and circulated, and it gets specific stuff done. When the government buys, say, roads we get pounds to circulate and we get some roads. Since the government is the buyer it can request whatever it wants. It can demand bombs or hospitals or whatever. The government creates demand for whatever it offers to buy. The people who worked on those things will now have money to spend, adding to someone else’s income allowing greater employment  and creating new supply chains each link of which being a possible employer. The pounds either remain in circulation or they end up being paid as tax back to the treasury (or sit in a savings account waiting to be spent).

So austerity is an attempt to stop a perfectly healthy and effective means of expanding the money supply, which is necessary to increase employment, forcing the economy to resort to bank lending and savings raiding to finance expansion. If the government implements policies to stop dangerous bank lending then it intrinsically limits the extent to which banks can expand the money supply, which could stop that expansion from resulting in full employment, assuming that those running banks would allow full employment at all (and it will likely mean raiding savings as well). If, however, the government gives banks freedom to meet all expansionary demand for new money the result could include full employment and probable catastrophic failure of the banking system (and probably raiding of savings as well). We can assume this failure is very likely given that we have already seen it happen when we gave banks freedom while also running a bigger deficit, in other words when the treasury and the banks were sharing the demand for new money it crashed and we didn’t achieve close to full employment. Leaving money creation to banks and having the government not run a deficit and take part in bank lending will likely fail faster and harder and not get close to full employment either. So we’ve got that to look forward to. It is likely that the current government won’t be in power when this happens, they’ll be in opposition blaming whoever is in power. And probably insisting that governments don’t create jobs.

I often think that if people knew what our governors really believe, or are willing to pretend they believe, about how our country works they would be horrified. The theories that form the basis of the political class’ framework for managing our country are mostly superstitions and religious nonsense, but the topics are so convoluted and boring that they’ve managed to keep it all a secret. This smokescreen around their beliefs has created a kind messy, self-contradicting, cartoon reality that can be twisted and shaped to fit any story, which is exactly the way politicians, all politicians, like things to be. Politicians would never risk reality coming into their discussions if they can help it.

I just overheard a man from the Guardian newspaper on TV, on a discussion show, say to the audience members “the deficit on all of your pensions will be £75 000!” I have no idea what he could possibly think that means.

Luckily, I have a high threshold for convoluted, boring subjects. In these religious ideas there is a particularly crazy idea. One that they will never let slip. They think that unemployment is necessary.

This idea is interesting because it really shows everything that has gone wrong with how we run our country, but first thing’s first, why do they think unemployment is necessary? The reasoning is this: if there were more jobs than people the companies would have to compete for workers, this would force them to offer higher wages to get staff. Higher wages mean higher costs, which means higher prices. Higher prices is called inflation and inflation is like the devil incarnate to economists. So if you eliminate unemployment you unleash the inflation monster and you destroy the economy.

Now this misses the obvious point that prices might be higher but wages would be too. If everything costs twice as much but wages are twice as much then any inflation just cancels itself out. So what’s the problem?

The problem is that there is a group of people who earn money, not by being paid wages, but by capital investment (which is a technical term for “owning stuff”, another one of those smoke screens). For those people wages are a cost they pay to maintain those capital investments. For example, if you own a stretch of land that you rent out you might have to pay people to look after it. Those people have a vested interest in wages being as low as possible. Those people also have vast amounts of money from centuries of capital investments, they could pay people wages with that money or they could spend a fraction of it to buy politicians and theorists to write and spread nonsense scare stories about what will happen if they don’t get what they want.

The result of this is everything we see. Wages have been held down for decades while returns for capital investors have increased. Wealth, and therefor control, is being concentrated into a smaller and smaller fraction of the population. At the top of the pile we have a financial sector that engages in no actual production, their capital is imaginary, hires very few people, and yet commands extraordinary profits for the people who own that capital. The government is implementing policies designed to cause unemployment.  When the government increases interest rates they do it because they believe it will slow down economic expansion, that is, stop people doing new productive activities, because they are afraid, or say they are, of runaway inflation. The most extreme measure is austerity. New jobs require new pounds. New pounds come from the treasury deficit. Austerity is designed to stop the creation of new pounds and thereby limit how many new jobs the economy can finance. They want to maintain what they call a “buffer stock” of workers to ensure employers can always find someone cheaper.

The UK’s £1.7 billion surcharge is the big thing in UE/UK news right now. It’s in the interests of Cameron and Osborne to present this surcharge as a serious problem for two reasons. Firstly, because it presents the EU in a negative light forcing us to part with pounds at a time when we need them all, and secondly because it’s an opportunity to spin themselves as heroes, even if only in that they publicly resist it. Although they managed to totally **** that up. ALittleEcon describes the situation here.

The question is why should we be worried about this? Well, as far as I can tell even if paying the surcharge causes a problem for us, which is questionable, the problem is not at all what we are supposed to think it is.

We are supposed to imagine that we can only pay this bill if we give something else up. We need to give up a hospital or something. What actually happens when the government pays this bill? Someone at the Bank of England opens a spread sheet, finds the row that represents the EU’s bank account, and increments it by 1.7 billion. That’s it. They don’t have to raid any savings, or some budget. They don’t have to find a pile of cash somewhere. There is no bank account they withdraw from. They just press some keys and that’s that. No budgetary effects at all. If they then choose to subtract the same amount from somewhere else that’s purely up to them. Incidentally, the talk about the interest that might or might not be incurred is ridiculous. The government can pay that bill any time they want regardless of how big it is, so if they could only be forced to pay late fees if they choose to put off paying it, but there is no intrinsic reason for them to wait. Again, they don’t have to get the money from anywhere.

The EU can then do two things with the pounds in that account. They can buy things from the UK or they can trade it on the currency exchange market. If they buy things from us then, obviously, the pounds go right into one of our bank accounts. That would have some effect on prices. What effect? No-one has of yet provided a model to figure that out so there is no way to know. Anybody buying anything has a similar effect but we rarely stress about that.

The only clear effect of our government issuing the pounds needed to pay the surcharge is it’s effect on the exchange rate. You have to accept that the law of supply and demand holds, which is shaky but, assuming it does, if we increase the supply of pounds by some factor then it’s value should drop by the same factor. If we double the number of pounds in circulation then we would halve it’s value. In theory… which they call a law. So the magnitude of the effect is equal to the magnitude of the change of supply… right? We know the change is £1.7 billion, but what’s the total supply of pounds? If you go to the Bank of England website they have data on this. I think it’s at about £1.5 trillion. That puts this theoretical total effect on exchange rates in the range of about 0.1% over some period of time. To put this in perspective the Pound:Euro exchange rate has moved around over a range of 10% over the last couple of years. We’d have to issue 100 times this surcharge just to get back to 2012 rates.

Would this flicker in exchange rates be bad? Who knows. It would (again assuming theory holds) make imports more expensive and exports more profitable. Is this enough to warrant offsetting the pounds placed in the EU’s bank account by taking the same number away from some other public services? Given that our public services are being strangled to death through lack of investment I imagine that the theoretical exchange rate blip is a better choice.



Sam Harris collided with Ben Affleck recently on Bill Maher’s show. Affleck accused Harris of being racist and presenting opinions that are ugly while discussing the behaviour of what Maher called the “Muslim World”. The video spread and inspired lots of reflective opinion pieces. The opinions seem polarised, even in the new atheist community. The original video has been shared with the title “Affleck 1, Harris 0” as often as with the title “Harris 1, Affleck 0”. It’s interesting that people who consider themselves rational are happy to accept the rants of a man who thought that germs were a conspiracy.

Harris responded to this case specifically by arguing that Affleck was belligerent, which may well be the case, and wrong, and to the general case in an article asking “Can liberalism be saved from itself?” in which he criticises liberals for having a blind spot for Muslim extremism.

A few days later I noticed a post on the Richard Dawkins Foundation’s facebook page by Jerry Coyne in which he criticises “liberals” for holding to “the notion that Muslims should be held to a lower standard of behavior than people in the West”. This, for me, has purged any respect I had for new atheism movement, at least for its guiding lights.

In his recent posts about the Gaza conflict, in which Harris argues that Israel is the worlds most humanitarian ethnic cleanser, he had an exchange with Andrew Sullivan. In it he said that “the problem with invoking history in this discussion is that you have to decide when to start the clock”. There is another name for history: the facts. It’s inconvenient and complicated; more so because it’s relevant. A person considering themselves a scientist and ignoring history is, well, doing something wrong. The facts that Harris prefers to cite are from opinion polls, like the ones that ask Muslims if they think it’s OK to kill to protect Islam. Opinion polls are great but they tell you nothing about causation, they just tell you about how people say they conceptualise things. Harris of all people, being a neuroscientist, should be well aware that people telling you how they think might not be the best source of data on action causation. Also, Harris never mentions what the results would be of a poll asking Americans, either Christian, Muslim, Jewish or Atheist, whether it’s OK to murder to protect the USA, or ‘Freedom’ or ‘Liberty’ and ‘Democracy’ or some other culturally loaded concepts that mean something different to everyone.

It got me thinking: how extreme are Muslims, really? I thought it would be interesting to take stock of things that have actually happened. To solve the problem of when to start the clock ticking I thought, surely, the start of the span of living memory would be reasonable.

This history begins shortly after the collapse of the Ottoman Empire a few years after the First World War. The Ottomans were Muslims and operated the Caliphate. This event is the end of anything that could be called “the Muslim World” in any coherent sense. Contrary to T. E. Laurence’s stories the majority of Muslims were perfectly happy to be part of the Ottoman Empire, but as usual, like most populations, they had no say. The Ottoman territories were carved up and shared out largely between Britain and France. Three regions: Baghdad, Mosel and Basra, home to three different ethnic groups (roughly Sunni, Shia and Kurdish) were formed into the Kindgom of Iraq. A leader was inserted, Faisal, a man who as far as I can tell never even lived in Iraq, as a kind of compensation from Churchill who was a big fan and friend of T. E. Laurence. He felt that the Hashemites should be rewarded. There was no election. Faisal was a member of the Hashemite clan, descendents of Mohammed, they had tried to grab control of the Ottoman Empire during WWI and were hacked off that Britain didn’t give it to them after they organised the “Arab Revolt” (which was a military power grab). Later, Faisal’s brother was made King of Transjordan, by Britain, without election to keep him happy. What did the Muslims at a large have to do with this so far? Not a great deal.
Between the world wars there was a huge change in worldwide geopolitical landscape with the Russian Bolshevik Revolution. Muslims were involved, they comprised several ethnic minorities in Russia and as such have been subject to various and systematic oppression for centuries.

Not long later WWII happens. Anti-Semitism, which wasn’t unique to Germany, or even Europe (although Jews in the Middle East were given broadly free mobility), was given lethal form when Europeans busied themselves conducting one of most awful chapters in modern history. What did the Muslims have to do with that? Not a lot, although they were drafted to fight through colonial mandate.

WWII ended with the US nuking two cities. Now, in the land of extremism, surely the nuking of two cities must be the King and Queen. These events are even more extreme when you look at the narrative surrounding them. You can find plenty of rational, educated and moral people arguing that it was unfortunate but necessary and that it shortened the war, indirectly saving lives. Some even argue that not only was it moral, not doing it would have been immoral. The justification for these atrocities is based on lies. The US high command had been told that the Japanese were ready to surrender and had no capacity to fight. We know now because the documents were declassified. The Japanese had one condition: that the Emperor retained the status of god. The Whitehouse wouldn’t accept that, America doesn’t get told what to do, and so chose to nuke them instead.

Later Britain lost control of its South West Asia colonies because of anti-colonial revolts and the prototype Israel-Palestine conflict being developed by terrorists that would later be given a state to run. Britain formally handed the situation over to the UN who issued the resolution making Israel a thing. What did the Muslims have to do with this? Well they weren’t pleased with the idea of the UN drawing more lines on maps and declaring them states, not such an unusual reaction, but their opinions didn’t matter (their disapproval of that resolution is somehow used as grounds today to argue that they have no rights to a Palestinian state and therefore no rights to resist Israel’s expansion). Arabs were seen as a set of backward and numerically irrelevant tribes.

Shortly after Israel became a state there was an Arab-Israeli war, although it’s more accurate to say that a civil war that was already under way continued. Israel took 60% of the land designated by the UN as Palestinian. Note that the states involved: Israel, Syria, Jordan, Iraq and Egypt, all states that were either literally created by the west or at least highly steered by western neo-colonial influence. The West (with Russian interference) had essentially created a series of units of influence designed to act as agents in the Middle East that had their own interests and often fell out with each other. There wasn’t a great deal of democracy going on, more a set of warlords, balanced precariously in place, trying to get more control.

At about this time a civil war broke out in Burma, which never ended. On the one side are a series of pro-Government movements, starting with the Anti-Fascist Peoples Freedom League, Buddhist and Socialist in ideology. Later the DKBA, a Buddhist movement, joined the anti-government side, together with various military ogranisations. The US supports the anti-government side, as does Mujahedeen. The war kicked off after Burma gained independence from Britain and the situation escalated sharply when the state declared Buddhism as the official religion.
In parallel a war broke out in Malaya. The locals weren’t happy about the way the British were running their economy (as a means to get the stuff Britain needed to recover from WWII, what elites now call globalisation). They had moved from Japanese occupation to British neo-colonialism. Protests were punished and eventually a continuous war broke out.

A few years later the US goes to war with North Korea, which was one of the most advanced economies in Asia, second only to Japan, and literally bombed the whole country to the ground. Recently declassified documents mention US generals in awe of their own destructive power as they watched villages washed away by the water burst from the dams they were destroying. Islam had nothing to do with this.

Later the US decides to attack Vietnam because they didn’t like how they were organising their own country. The US had been running proxy terrorism plans to undermine Vietnamese integration, then decided to switch to overt attack. They attacked the south but dressed it as an attack on northern insurgents in the south, even though there weren’t any. They destroyed the country. There are people being born right now with deformities resulting from the chemical weapons dropped on their grandparents.

At the same time the world almost ended. The US became annoyed because Russia moved nukes to Cuba. US had had nukes in Turkey pointing at Moscow for years, but that doesn’t matter, the US can do what it wants, it can nuke cities and everyone will think it’s fine. Kennedy calculated the odds of nuclear war to be 50:50. Pretty extreme. As far as I’m aware he didn’t read the Quran. Good times.

So far this has sketched a significant chunk of murder and mayhem, covering the first half of a lifetime of history, and so far the Muslims have had little involvement with the exception of the WWI (the Ottoman Empire could have easily been on the side of the British if Churchill hadn’t impounded some war ships that were supposed to go them and there were plenty of Muslims fighting against the Ottomans too) and the Israel-Palestine conflict. Many of the conflicts that involve Muslim populations, that are the backdrop for our impression of Muslim extremism, are largely extensions of the Palestine conflict in some way, in which the west is complicit.

Those are the big obvious conflicts but there are of course many others. There are also whole continents worth of history of carnage that I haven’t mentioned. There were and are various armies, many citing Christian ideologies, marching around Africa turning children into soldiers and sex slaves, situations tangled in old colonial pathologies. There’s also plenty of history of terrorism in the South Americas, of US rigging elections to get their representatives in power and resorting to kill squads and terrorism when that doesn’t work out. The west’s hands are bloody from both of these histories and neither can claim Islam as a factor. There are also lots of examples of extreme violence if you look at the history surrounding China but although Muslim populations feature Islam can hardly be said to be a significant factor there either, and much like in the case of Russia Muslims are very much the minorities.

Since the point of this is to get a perspective on what we can call Muslim extremism in reality we can look at conflicts in reverse order of deaths focusing at events in the last century that involve Muslims in any systematic sense:

The first would be WWI with Muslims fighting on both sides. The next is the Iran-Iraq war. It started when Iraq, under the control of the Ba’ath party, US/UK endorsed and supported and equipped, invaded Iran. The UK, thanks to Thatcher, who liked Hussein a lot, had given him lots of weapons. The US declassified Iraq as a terrorist state so that they could sell them chemical weapons. The Iran-Contra weapons scandal was happening during all of this. And just to add an extremist jewel to this crown, the US shot down an Iranian passenger jet flying over Iranian airspace for no reason other than, apparently, to try out their weapons.

The next would be the Soviet war in Afghanistan, a recent episode in the Russian version of a familiar story of colonial intervention. Russia pulled out and the country went into a continuous civil war that lasted for decades. The Russians left lots of weapons behind. This is the context in which the Taliban, often thought of as a perfect example of Islamic craziness, came into power backed by, you guessed it, the west. They only became bad guys when they started thinking that they had a right to the oil resources inside Afghanistan in the mid 90s.

Next is the Algerian Civil war, which seemed to be largely a nationalist revolt against a brutal French colonial regime.
Next the Bangladesh Liberation War, which was a nationalism conflict, resulting in the Independence of Bangladesh. The conflict seems to have stemmed from perceived economic exploitation of one region over another by a state that didn’t want to loose control. This template of violence can be seen over and over in history, in fact, the US War of Independence has that exact template but we don’t consider that an example of extremism.
The Somali War started in the 80s and has never really stopped. The conflict is a government/anti-government affair beginning as resistance to Siad Barre. The US joined in on the anti-government side. Guess who supported Siad Barre until just before the war.

The Syrian Civil war is another ongoing conflict borne of resistance to an oppressive (incidentally secular nationalist) regime. The Muslim population are the victims in this situation, subject to a small group of warlords who took power in a military coupe and never gave it up. The Arab-Israel conflict actually helped the Assad regime take power in that it was seen as a strong contender that was able and willing to stand up to Israel. Note that at the moment the west is figuring out how to destroy Islamic State, which would help Assad a great deal.

The ongoing war in Darfur has resulted in hundreds of thousands of deaths and displaced millions. This conflict seems to correlate mostly to Arab/non-Arab ethnic sets rather than Muslim/non-Muslim ones.

Next is the First Iraq war. This is a big one in terms of deaths. Remember that not long before both the US and UK bent over backwards to give Hussein weapons of mass destruction. If you are going to give a warlord such weapons, someone is going to get gassed. He had already ethnically cleansed Kurds by the time the Iraq war began but we didn’t care. The conflict between Iraq and the Kurds goes all the way back to 1912 and started with one King Faisal of Iraq, that Hashemite clan leader the British put in power I mentioned earlier.

The Islamic Insurgency in the Philippines, which is an interesting choice of name, is another conflict arising from resistance to colonial rule. Each time the current colonial power went to war with someone and was defeated the locals were taken over by the winner and so there is continuous resistance, termed ‘insurgency’. You can tell when the resistance can be called ‘extremism’; it’s extremism when the colonial power is the US.

That gets us down into the sub 100 000-death conflicts and so far Islam hasn’t featured as a significant predictive factor. You might think it callous to lump these conflicts together based on kill-count and pass over them, which is true, every death is important, but 300,000 Americans died since 1970 in industrial accidents. How many people have died because we have devoted resources to developing Viagra or curing baldness instead of Malaria/Aids/Ebola/Rabies/Small Pox/Naeglaria treatments? We have policies killing more people than these conflicts.

What’s interesting is that the examples of extremism that leap to mind aren’t present above. We tend to think of historically small events involving relatively tiny death counts as somehow extraordinarily relevant, for example 911, or the attack on Pearl Harbor, or videos of someone being beheaded. Meanwhile the west is apparently free to carpet bomb cities or murder people in mountains in Afghanistan and the world is supposed to be thankful. To any objective analysis it seems that the discriminating variable is level of technology. If you kill a few dozen people with a predator drone that’s fine, do it with a home-made car bomb and you’re an extremist.

It could be argued that I have ignored the content of what people like Harris are saying is extremism, that they were more talking about women being forced to wear head coverings or treatment of gays. As it happens forcing women to hide their faces originated in Ancient Greece, not the Middle East. In the Middle East it was the other way around: certain women weren’t allowed to wear head coverings. Anyway, that just reasserts the question: why are some things “extreme” and other objectively more extreme things not? Why is being an extremist a sin while knowingly creating, training and arming them isn’t? It seems that the form of argument used by Harris or Maher or Coyne is to create a box called extremism, put a tiny set of real events into it, leaving ourselves out, and.. what do you know? It’s full of the warlords we put in power!

Muslims have been involved in some huge and terrible conflicts but they have also had nothing to do with many of the biggest and worst, and the schematic of these conflicts tend to be transferable across history, geography and culture (resistance to oppression and unwanted government regimes). There is a difference in quantity but also of quality. Conflicts involving Muslims tend to be local border disputes and civil wars, nothing like the type of global conquests that the west engages in. And, again, even those local conflicts have arisen with significant western interference. Viewed in the grand scheme Muslims are relatively meek. And when you swap Muslims for some other group, and keep the West, you see the same patterns of violence and “extremism” in other parts of the world.

So perhaps non-Muslims so critical of Muslim extremism should redirect their energies away from worrying about what Muslims are up to and toward modifying the behaviour of their own states.

In response to: http://alittleecon.wordpress.com/2014/09/13/objections-to-a-job-guarantee/

Actually this isn’t really a response; it’s more of an elaboration. Some common objections to a theoretical Job Guarantee are listed in the post. I wanted to add that the objections really highlight what I think is a muddling of what unemployment actually is, and what solving it as a problem actually achieves.

The most important detail, that is easily missed, is that employment is a purely financial construct. It is an aspect of the monetary system, which is financial, and not part of the ‘real’ economy, and solving unemployment has nothing to do with solving any real output problem.

We tend to think of jobs as, pretty much just, doing stuff. This is incomplete. You could do whatever you do as a job, right now, without anyone paying you to do it. No-one can really stop you pursuing whatever you think the work content of jobs are. So what’s difference between driving a bus around and being employed as a bus driver? Simple: you get paid. If you are seeking to be paid to do something you are unemployed. If you are seeking to just fill your time and not get paid you are not unemployed. Unemployment is the problem that there are people seeking to be paid, not that they are seeking to do stuff. People may well be seeking to do stuff, people work for reasons other than to get paid, but that is not unemployment.

Solving unemployment is a financial solution to a financial problem. You can solve unemployment by hiring people to do useful things, by hiring them to do pointless things, or by hiring them to do something terrible like kill each other*. All of these policies would, by definition, solve unemployment, and that’s that. The confusion is mixing the solution to unemployment with the solution to the problem of useful real output. They are not related. As the above example shows it’s possible to affect real output in whatever way you want, from terribly to brilliantly and everything in between, while eliminating unemployment. It’s also theoretically possible to have perfectly adequate real output (by whatever standard you want) without everyone being employed. You could even imagine a science fiction world in which no-one is employed but everyone is perfectly happy.

Talking about ‘non-jobs’ while discussing job guarantee is like discussing a balance sheet and just imagining what real assets the numbers represent, and then concluding the activity producing that sheet must be non-assets. Those numbers could represent anything, a balance sheet is just a financial description and doesn’t track real assets, let alone their qualitative value.

*all of which happen right now.

Immediately after the Scottish Independence referendum Nigel Farage complained that the UK government “made a promise to maintain the Barnett Formula whereby the UK taxpayer spends £1,600 more on every Scot than on every English person”. This kind of factoid is the sort of thing that immediately pisses people off. The problem is that it’s a nonsense figure that refers to nothing meaningful and hides far more important information.

If government spending consisted entirely of paying money directly into people’s pockets then he might have a point. Some is spent that way, of course, but, as everyone is well aware, a huge chunk of government spending pays for goods and services. There would be no point in the government paying people just to pay taxes. The government wants certain things done. For example, a large part goes to the NHS. The NHS then translates that money into a health services. The taxpayer then receives those services, not the money. The NHS provides those services by spending it’s budget on provisioning the goods and services necessary to provide health services. Ultimately the money it is budgeted ends up in the revenue stream of companies that provide it goods and services, some of which will end up in people’s pay packets and some of which will end up in share holders’ and owners’ pockets. Those share holders and owners could be anyone, anywhere. They could, and statistically are likely to be, in London. They could be in the US. The fact that the initial spending is geographically, in a sense, in Scotland has almost no baring on how the money filters down to people.

Another fact is that cost structures vary. So, say for the sake of argument, that for some reason transporting things is more expensive in Scotland. Maybe because of all of the hills. That means that provisioning of services to the public via the public sector will incur higher costs, say, to pay for extra fuel. That extra payment would show up, again, in the revenue stream of a company, in the case a multinational energy company. Or more precisely some weird holding account system somewhere so that shareholder profits can be maximised. Again, where the money ends up is a matter of topology of the economy, which has almost nothing to do with geography.

It might be, arguably, more reasonable to look at spending per head at the whole-nation level, but that figure is largely meaningless as it could be anything. Working out where money really ends up would, as far as I can tell, be perfectly doable. What makes it hard is that we would need access to data on where companies spend their money and, specifically, who all the shareholders are. That data might be available, partially, through public audit records, but we have no intention of really knowing because that might be too revealing. It’s far better to use nonsense metrics like spending-per-head.


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