Sunday, 30 September 2018

Our politics is dying because it has to


The right wing case for Brexit is not compelling at all. The Tory right are pushing for a minimalist trade deal with the EU for the sake of regulatory independence which they believe can be traded away to achieve more open trade with the rest of the world - namely the USA.

In this they are deaf to all of the warnings. If we become a third country with n regulatory cooperation then we cannot expect anything approaching the same level of frictionless trade with the EU and being outside of EU approvals systems means that a number of sectors from pharmaceuticals to automotive will see their export costs ramp up substantially.

Before we joined the EEC, there wasn't any significant ro-ro traffic at Dover. It wasn't even introduced until 1965 and was only handling a few hundred lorries a year until the early 70s. Then, the real growth came with the single market. Out JIT production lines along with fresh produce exports are effectively the children of the single market.

Should the UK diverge on standards then as much as we are looking at increased red tape at the borders we also face a higher frequency of inspections which could very well kill value chains entirely. This is a dilemma faced by Canadian producers who have to decide on either the USA or Europe as a market because it cannot be both.

This is the sort of detail that Tories are avoiding and being that they do not understand the system and being creatures of conformity they will latch on to whatever is spoonfed to them by the various lobbyists masquerading as think tanks. The fashion at the moment is a fixation on a US deal, contrary to all the best advice of expert functionaries from Ivan Rogers to Hosuk Lee-Makiyama.

What we are going to find is that any such deal falls flat on its face. If not we are looking at years of negotiation to produce an FTA far shallower than we might have expected and one which opens us up to the US dumping its agricultural surpluses while having nowhere near the freedom to trade in services that we would have in the EEA. We would be servicing a far smaller market and having deviated from the global standards employed by the EU we would find that market shrinking. 

Of course producers are free to mix and match if they can afford separate production lines but in all this time I have yet to see any serious analysis from a serious source that shows how we can replace single market trade, not least because as a general rule we will do less trade with more distant partners.

Being that Tories are Tories, they will not listen to expert advice on this and instead have cultivated their own ecosystem of quasi-expert soothsayers who steal the terminology of experts so as to appear plausible but to the trained ear are spouting gibberish. The good news is that the Tories won't be around long enough to complete negotiations with the USA. At this rate they may not even be around to negotiate the future relationship with the EU. Assuming we get that far, that is.

But what of the left wing case for Brexit? Trade Unionist, Paul Embery, sees a hard Brexit as a positive development in that it puts barriers up to low wage competition and prevents the further encroachment of globalisation. 

On the first count I am somewhat ambivalent. The spreadsheet sociopaths tell us there is no measurable impact on wages but that's ignoring the black market in labour and multivaried analysis. The experts on that matter tend to be ideologues and prone to dishonesty. See Portes, Jonathan. But then less trade equals fewer jobs. I'm not sure how the bottom decile wins either way. 

The second count is a much more complicated question in that technology is as much the culprit. Online transactions allow corporates to evade taxes depriving governments of legitimate income, forcing them to cut back on spending thus, if you're a Keynesian, shrinking aggregate demand. 

This actually points to the need for more intergovernmental cooperation to close down the loopholes and tackle tax havens, but there we see moves toward harmonised tax policies designed to eliminate arbitrage. That then is seen as an attack on sovereignty - which is about right in that it centralises economic policy. 

The right wing view is that we should be able to lower taxes and become a Singapore on Thames, but the EU most certainly will wield its soft power in retaliation and the imposition of non-tariff barriers might still deter business. Not an easy one to crack. 

There are a lot globalisation issues I have not fully reconciled in my thinking - but I'm relieved to see that none of the top thinkers in the field have either. The only solution I have settled upon is that democracy is really the only legitimate judge and that nation states are better able to respond to pressures in time. The EU is many things but it is not agile or responsive. Democracy is more at liberty to experiment. The Guardian this week takes a stab at outlining the left wing view
A small number of people in the Labour party and in the trade union movement take a different view. For them, Brexit is to be welcomed because the EU’s bias in favour of multinational capital, its hardwired monetarism and its obsession with balanced budgets means it is more Thatcherite than social democratic. For those remainers who say this is a caricature and that the EU is really about protecting labour rights and defending the interests of workers in a harsh, globalised world, left leavers have a one-word riposte: Greece.
In recent weeks there have been two publications that have challenged the mainstream view. The Left Case Against the EU by Costas Lapavitsas, a Soas economics professor, takes issue with the idea that the EU is all about cooperation and togetherness, a borderless paradise of interrailing and Erasmus schemes. The EU, Lapavitsas argues, is not a nation state that the left could battle to capture and then shape the way it is run. Rather, it is a transnational juggernaut geared to neoliberalism.
The European left’s “attachment to the EU as an inherently progressive development prevents it from being radical, and indeed integrates it into the neoliberal structures of European capitalism”, Lapavitsas says. “The left has become increasingly cut off from its historic constituency, the workers and the poor of Europe, who have naturally sought a voice elsewhere.”
This seems a pretty accurate assessment. The European left sees the EU as promoting democracy, egalitarianism and social liberalism, but the reality is somewhat different. The four pillars of the single market – free movement of goods, services, people and money – are actually the axioms of market fundamentalism, which is why Mrs Thatcher supported its creation. Meanwhile, the European court of justice has gradually turned itself into a body that enforces a free-market view of the world, placing more and more restrictions on the freedom of member states to make their own economic decisions.
This explains the division in the Labour party between the old left and the Metropolitan London "progressive" left. For the latter, the EU embodies much of the soft left Blairite social agenda and it affords them a number of entitlements and perks which is just enough for them to turn a blind eye to the many faults of the EU. This is why we see the neo-Blairite bratpack headed by Mike Galsworthy pounding the streets of Birmingham this week at the Tory conference.

It is actually this schizophrenic nature of the EU that leads to such a diverse array of criticisms. It all depends which prism you look through. For the right the EU is a centrally planned distinctly socialist affair, eliminating dynamism by bogging the labour market down with regulation and red tape. The old left, on the other hand, see the EU as a barrier to a socialist utopia.

Remainers point to nationalised utilities in European states arguing that the EU is no barrier to socialism, but this ignores the services liberalisation that forces even stated owned enterprises to open contracts to European bids along with various directives which, while they do not dictate private ownership, certainly govern the structure of markets and lead toward their liberalisation. See image. This is why the EEA is the least popular outcome for Brexiters of all stripes in that these such directives apply - and though there is scope to shape such rules and opt out of elements, EEA states still have to keep their markets open to the EU to the same governance methodology. 

As it happens I am not the biggest EEA fan for that exact reason. I just accept, unlike my fellow leavers, that the alternatives are worse and that many of these directives are in response to global obligations be they WTO commitments on government procurement to environmental measures agreed under international treaties. To repeal many of them we would also have to pull out of a number of climate accords which is politically improbable. I am also of the view that any combination of free trade deals is not likely to replace the trade we enjoy via the single market. 

There is also one other reason. I'm not a socialist. The idea of a Labour government meddling with the energy market, especially one intent on creating 400,000 "green jobs" is absolutely horrifying. The one thing Lexiters are right about is that the EU very much does stand in the way of Utopian left wing economic ideas and that is probably one of the few things in the EU's favour. Were I a Tory right now staring at an election defeat with Corbyn waiting in the wings I would be all the more keen on the EEA. 

But that then makes me a hypocrite doesn't it? Having argued for the supremacy of sovereignty and democracy, leaving a number of key policy areas inside the current system of controls is antithetical to much of what I have written. But then I am not a purist. If there is one thing I have learned in the last few years about politics is that you can never have it all your own way, there is always a trade off and if we are going to leave the EU then we shouldn't throw the baby out with the bathwater. 

More to the point, there are a lot of issues where Brexit doesn't actually solve anything. It won't make Stoke-on-Trent great again, it won't bring back the mines, it won't stand in the way of automation and in many cases, especially if the Tories get their way, it will exacerbate a number of known problems.

The essential problem for the UK is that its politics is so wildly out of touch and tribal. The Tories are pushing free trade dogma which has long ceased to be relevant while the left are talking about a reversion to a mode of socialism that was only really appropriate for its time in the era rebuilding the UK after the war. It is certainly incompatible with modern norms of porous borders - which, Brexit notwithstanding, we are not going to solve any time soon.

Essentially the have been seismic changes over the last forty years and governance has become more complicated than any one person can fully understand. For a lot of the problems we are fighting against the tide and struggling for solutions and in some cases there simply aren't any solutions. I do not see a satisfying resolution to the trade versus sovereignty dilemma. 

Being that these issue are of a complex and technical nature, and the public tends to gravitate toward politics of a more cultural nature, our politics isn't equipped to deal with many of these problems which is why we see them looking back in time and seeking to impose outdated doctrinal solutions. Of itself that is bad, but it is amplified by an ever more polarising media and one which struggles with nuance at the best of times.

What further compounds our problems is a very distinct cultural divide exacerbated by insecure labour and transient populations combined with high immigration. The culture war. Being that the EU adopts any passing progressive fad, using its soft power to impose its values, much of the hostility toward the EU is actually nothing at all to do with economics. Brexit is as much an attempt to reclaim British values (whatever they may be) and ensure UK legislation is made according to those values rather than the progressive values and Keynesian ideas of globalists.

While we are on heightened alert for a no deal Brexit and a serious economic collapse, it rather looks to me like we are on course of a political collapse come what may. Though there is now more of a discernible difference between Labour and the Tories than there has been in recent years, there is still a gaping gulf between Westminster and the rest of the country. Britain certainly didn't vote to leave the EU as an endorsement of hardcore libertarian free trade ideals any more than they especially wanted to bring about a new socialist order. 

For the moment I am politically homeless but I think I am in good company. I think I am in the ranks of the sane majority in my dismay and contempt for Westminster. There is certainly a demand for an alternative even if there is no supply. I think it will take a political collapse for that alternative to make itself apparent. 

As the Guardian notes, "almost all the energy on the remain side has been spent on keeping the UK inside the EU come what may. There has been nothing from remainers that would suggest that they have a serious plan for tackling the symptoms of Brexit. The same applies to reform of the EU". This is why stopping Brexit doesn't actually solve anything at all. Britain is in the midst of a full blown , economic, political and identity crisis where neither leave nor remain can provide any clarity.

What we are looking at here is a democratic correction as the institutions and politics of yore gasp their last. the world has changed and our politics needs to change with it. The EU certainly does safeguard the status quo but there is an instinct afoot, globally, that the status quo is ill-suited to whatever the new era is going to look like. In respect of that I think perhaps turmoil is the new status quo until there is a satisfactory one nation resolution. Our politics is dying because it has to die. 

As this blog has noted previously, there are too many time bombs in store for the near future that our current economic paradigm is not prepared for, from our housing crisis to our pensions crisis to our care crisis. All of these are thorny issues that require radical change when we have a political stalemate that actively discourages radicalism and reform. We talk about reform but we have forgotten the meaning of the world. All we do now is timid tinkering and top down reorganisation. 

If there is one thing we can say about Brexit is that it is disruptive. Reality will very rapidly torpedo the delusions of Tory free traders, and soon after Brexit the socialists will find there simply isn;t the money to implement their half-baked ideas. They are still making policy as though the UK will have anything like the same tax receipts and credit rating. Brexit will be a bucket of cold water and will seriously impact on public services to the point where we have no choice but to explore new ideas be they along the lines of big society voluntarism or privatisation.

We are often told that we Brexiters didn't know what we were voting for. But we did. We voted for a departure from the status quo because as much as it isn't delivering it is not sustainable. It's fairer to say we did not know what we'd be getting. But then none of us do. It comes down to one very simple estimation as to whether you think we can go on having elections where voting makes no difference and nothing ever gets done. I do not think that we can and I think ducking the issue has a far greater price than any mode of Brexit. 

CPC18: a gathering of zombies


Party conferences are generally tedious affairs. There is nothing more ghastly than a gathering of self-congratulatory political luvvies and the media. Why they even bother to stage an event in Birmingham when it's largely an outing for the functionaries of the Westminster bubble beats the hell out of me.

This one ought to be the exception to the rule in that events of the next few months are pivotal and the power struggle within the Tory party ought to be of some interest. But it isn't. Theresa May has doubled down on her Chequers plan despite its unpopularity with the party, entirely disregarding that small but somewhat important detail that Brussels has ruled it out.

The reason it isn't interesting is because this is not exactly news nor is it news that her opponents do not have a workable plan either. The effect is much the same. Without a plan agreeable to Brussels it scarcely matters who wins the day.

If there is a theme thus far it is an attempt to shift the blame on the EU for the current impasse. Jeremy Hunt has been at it for a week now - treating us the the risible spectacle of reinventing himself as a born again Brexiter. Meanwhile on the fringes we see the usual circus of thinktanks and lobby groups each pushing their own wares on a largely unthinking audience. No doubt there is a coordinated effort to drum up support for the IEA's "Plan A plus" which has thus far been panned by anyone with even half a grasp of the issues.

You might think that with this being the final conference before we leave the EU we would be hearing a torrent of ideas as to what comes after we leave the EU. There is, however, no real vision and the Tories are likely to keep their true agendas under their hats. We are instead going to get more of the same timid recycled mantras we hear every year.

This is not to say that the Labour conference was any better. They managed not to decide on a Brexit policy and, so far as I gathered, they intend to renationalise the railways which solves no problem I currently have. British politics generally doesn't do big ideas and they've even managed to turn a seismic event like Brexit into a wall of tedious noise.

It is, though, unreasonable to expect any big ideas from party conferences. Party politics, in this age especially, is an exercise in conformity and signalling to others your loyalty to the tribal scriptures. The entire apparatus is designed to exclude outsiders and other ideas.

For a while now I've had a sense that British politics is in the grip of a fever and have stopped trying to influence the debate. When it reaches the final round of a tribal deathmatch and is reduced to only two competing ideas, loyalties are chosen on the basis of where the gatekeepers are heading. Any alternate ideas are sideshows.

Being that the media is only interested in the biff-bam showdowns, it ceases to be interested in the policy outcomes. It doesn't matter to them that neither plan will work and likely haven't noticed. Being that the wider population is bored witless with it and unable to do anything about any of the no deal warnings even if they wee taken seriously, one gets a sense that most people have tuned out.

As to the public debate, one thing I find quite strange about Twitter is that it has moods. One gets a sixth sense for when it is busy and very often one can tell when activity has dropped off completely. For someone who practically lives on social media it's been a tedious old time of late. For a long time I was of the view that a good day on social media is better than good a day doing anything else - in that some days can be busy and richly rewarding. Those days seem long behind me now.

Here I have a feeling that the national debate will not reignite until something of significance happens. Possibly not until we have formally left the EU. That is when there are scores to settle. For thee years we've had the entire Tory machinery broadcasting its message that everything will be fine and that we can get a better deal than Norway. It's all on record. It's going to be a turkey shoot.

For the next week, though, and for the foreseeable future, the debate will remain a pastiche of itself. They have no understanding of the processes involved. They simply suck up the prevailing narrative and regurgitate it. We will not seem them attending to the urgent and the important simply because they lack the value system to realise what is urgent and important. This is the fag end of British politics and there's nothing left to do now but watch it all burn.

Friday, 28 September 2018

Brexit has become a tribal freak show


I didn't used to swear particularly often on Twitter. I am told that foul language turns people away. None of the data I get confirms this point of view. This blog is still growing. But as much as my recent outbursts of blue language are born of frustration and sheer tedium it's actually interesting to see what motivates people to respond.

My writing of late on this blog has not been up to the standard I normally require of myself. There is little to say that I have not already said and in terms of material progress in the Brexit debate we are still nowhere. That said, even some of my recent work is, if I say so myself, better than much of what is out there passing itself off as serious analysis. The further back I go the better it is.

What this blog has attempted to do is expand the debate and examine the Brexit issue from every imaginable angle. I do so without being a member of a party or mainstream organisation and I am telling both sides of the divide things that they do not want to hear. It is, therefore, mostly ignored - as is typical for independent bloggers. I am rehabilitated by either side whenever I am momentarily useful and put back in my "unclean" box when I am not.

One of the more tedious mantras Twitterers like to deploy is that more people would listen if only I didn't swear or if only I was nicer or if only I didn't say rude things about people. The truth of the matter, though, is that these people only respond when they feel like wagging the finger, usually when I've committed what is, in their eyes, a blue on blue attack or a Twitter faux pas.

In this I am not particularly popular with the Brexit blob in that I am quite at home attacking the idiocy of Boris Johnson, Julia Dunning-Kruger, Rees-Mogg, Ian Dale, Kate Andrews, Low Fact Chloe and all of the other dismal functionaries of the London Brexit bubble. Here I am told "play the ball, not the man" but if you put arguments to any of these people, however politely broached and you are talking to dead space while they continue to transmit their stupidity.

If, however, I were to refer to one of their number as scum-sucking inbred Tory vermin, it's always fun watching the sycophants and "white knights" rushing in to defend their Brexit heroes. And that is partly what this blog explores - the bovine tribal nature of our politics where to exist at all and to be validated one must subordinate oneself to an opinion gatekeeper.

Very often my blue language loses me thirty or so Twitter followers but they are easily replaced whenever I do one of my technical threads. There just hasn't been much cause to recently since the debate has gone hyper-tribal and nobody is listening to anyone or anything.

This is not to say that interesting things are not happening. It's just that the Brexit debate exists in its own reality and each side has its own pet narrative and will disregard anything that forces them to question their own shtick. Take, for example, the debate around regulation. The trade wonks of Twitter will blether endlessly about chlorinated chicken largely because they are reacting to the dribble piped out by the likes of the IEA.

This is comfortable little grove for them where they can churn out their well rehearsed and stunningly unoriginal screeds to show everybody how clever they are. But they are no more engaging in reality than the right wing think tanks. The fact is that a comprehensive FTA between the UK and the USA is not going to happen and even a shallow deal is years down the line. What happens between now and then (one way or the other) will likely ensure that we stay inside the EU standards orbit.

This is where I routinely point out that EU standards are in fact global standards which brings me to some interesting news today from UNECE. China has bridged its mineral and petroleum resource classification systems to UNFC. UNFC, developed at UNECE, is a universally acceptable and internationally applicable system for the management of all energy and mineral resources.

This is no small development. It gives us an insight into the direction of travel. While the USA is trying to build its own standards fiefdom away from the WTO system through the TTP, China is plugging into the systems already used by the EU - and when you have two regulatory superpowers converging, that tells us that moving out of the EU standards orbit in favour of the USA means we will be servicing a smaller market globally. That is the more significant issue and more crucial than the dribble about fluoridated ocelots.

These linkages are the building blocks to an emergent global single market and exactly the sort of development that could supercharge global trade and eliminate many of the barriers that stand in the way of completing FTAs. This is where we really ought to be ramping up our regulatory diplomacy. There are eleven different types of international regulatory cooperation yet the debate is still blethering about FTAs as though they were the only instrument. 

This is where I get quite snotty with self-regarding trade "experts" who churn out boilerplate received wisdom and expect to be applauded as though they were adding something original to the debate. Being that it is kosher think tankery, though, and not the cretinous effluvia and corporate lobbying we see from the IEA and CATO, this is what is slavishly repeated in the pages of the Guardian and the FT. They will fiercely guard their little dunghill - not least because it suits the "Brexit is bad" narrative, but mainly because it drags them out of their comfort zone.

Meanwhile, none of this is useful knowledge to Brexiters who are obsessing over regulatory sovereignty and "making our own laws" who will eventually discover that there is no economic or practical utility in doing so - especially when a USA agreement falls flat on its face. For starters parliament has to ratify it and the "fwee twade" obsessives are in the minority on this one. This is assuming the Tories are even still around to negotiate such a deal. 

In the end neither side is interested in debate. They are only looking to reinforce their own narratives and use weaponised offence taking to marginalise opponents and critics. Genuine informed debate on Twitter is rare and in the main there is no real curiosity beyond what is immediately politically useful. 

As to the media, the media has become a freak show where only the most outlandish views are given an airing in order to generate controversy. This explains their ongoing love affair with the odious Boris Johnson. Forensic and detailed work, especially original work, will forever languish in obscurity. The only thing that counts in this game is conformity and who you are brown-nosing.

For now, any real insight is drowned out entirely. Instead of credible Brexit plans, all we are getting is weak triangulation between warring factions with each party trying to reconcile the irreconcilable contradictions within their own movements. Nobody is seriously engaging with reality. The debate is no longer about distinct issues and I honestly don't think Brexiters even care. Hard Brexit is just a banner for the hard right to rally under. They are not interested in what damage it will do. This is purely about taking power.

It doesn't matter if their latest plan has no chance of working and doesn't address the issues. It exists only as a political stick to beat Theresa May with. The ring leaders don't need to do detail because the Tory Brexit clan will believe whatever they are told to believe. This recent idiocy from James Delingpole illustrates the whole of the thinking process. It is simply a matter of who it triggers and which gatekeeper supports it. He hasn't read it, he hasn't understood it and he has zero interest in the substance.

Similarly we get classic gatekeeper behaviour from radio presenter Ian Dale, who would like us to believe he is a studied authority and obviously believes his word should count for something despite knowing precisely nothing about the mechanics of modern trade - or indeed the Brexit process. 


Being that Dale does have a following of fawning sycophants it will no doubt feed into the narrative that there exists an alternative workable plan to Chequers. This is reinforced by a puff piece in City AM from the dimwitted Kate Andrews. We only need an embarrassingly moronic piece from Brendan O'Neill and we have the trifecta.   

What we are looking at here is pure party tribalism. Generally speaking the parties do no thinking of their own so they will adopt whatever dross comes along from whichever think tank most publicly confirms their existing prejudices. That is why think tanks (all of them without exception) produce low grade tribal dross.

They are not in business to get things right. they are in business to stay in business - to maintain their monopoly of influence and their access to high places which they will sell to lobbyists. They all do it and they are largely insulated from the consequences.

What is needed is a forensic appraisal of the situation, acknowledging all of the facts whether we like them or not. But there's nobody in this game honest enough to do that. I've tried and consequently don't exist. You can't tell anybody what they do not want to hear. All that's left to do is call them braindead ****s because that's exactly what they are.

The problem here is that whenever anybody lends their loyalty to a party or cause they suspend all of their critical faculties to the point of derangement, believing that anybody who believes as they do is trustworthy and anybody else is an "other". Falling foul of both sides I find myself in a no man's land.

Here I am not alone. Anybody remotely sane is now politically homeless and held hostage to the lunatic wings of Labour and the Tories with nothing approaching a credible alternative. This fever has to burn itself out however long it takes. Too bad it will take us all down with it. 

Thursday, 27 September 2018

British influence beyond Brexit


There is some debate on Twitter as to the UK's future influence in regulatory affairs. Predictably the remainer brigade see the UK as a down and out with nothing to offer and utterly powerless without the EU. I am quite sure they would like that to be the case but it isn't.

There are six British universities in the top 30 in the World University Rankings published this week - and none from the EU. This matters as international cooperation agreements involving UK universities are part of our soft power apparatus - and the means by which we continue to influence regulation. International regulatory bodies have cooperation agreements with all of them. We influence the agenda from contract law (UNIDROIT) to clean energy (UNECE).

Some doubt that UK universities will continue to perform after Brexit, but the fact of the matter is that prestige is a big draw. Oxford is still Oxford and you only need to visit the place to see why wealthy and capable people would want an Oxford degree on their CV. Much will depend on the type of deal we secure with the EU and continued support for our universities but it is hard to envisage any scenario where our best institutions fail to compete globally. 

It should also be noted that when we leave the EU we are also taking back a lot of administrative and technical talent. Though the EMA is relocating to Amsterdam it is struggling to bring its people with it. Departures could be as high as 30% of staff, with what the agency describes as "a high degree of uncertainty regarding mid-term staff retention". Previously, the agency had estimated only a 19% loss of staff. Moreover, the predicted "brain drain" just isn't going to happen. Families are nowhere near as rootless as the EU would like them to be.

One of the argument for Brexit, in my view erroneous, is that the UK has no influence in Brussels. Far from it. Britain has shaped the Commission and we practically invented bureaucracy. The national expertise is good governance and that will continue to be a major cultural export for the UK, not least as we are seeing Malaysia and the far east gradually upping their game in terms of civics. Those functions of UK government not run directly by politicians work probably better than anywhere.

When we leave the EU we are taking with us a large contingent of the EU's intellectual capital and some of its best human resources. That is not to say it's a mortal blow for the EU but even the EU has said the UK's input will be missed. What matters now is how we re-purpose that talent to act in the direct national interest.

Remainers continue to assert that a country of 65 million is irrelevant after Brexit. This actually quite an objectionable dismissal of the human capital in the UK, not forgetting that, Brexit notwithstanding, we are still a wealthy country by most measures. The UK is a technological pioneer in the nuclear sector and with that goes influence in emerging standards. Standards will often take best practice derived from experience and our voice is not going to be excluded just for having left the EU.

When we leave the EU the UK regains its right of initiative in all of the global bodies and there is no reason why we cannot use that to our advantage as others have. If we managed to shape the EU to become what it is, through carefully chosen ad-hoc sectoral alliances we can outflank the EU which is often crippled by its own internal contradictions and the protectionist instincts of member states.

Brexit will mean the UK will suffer a loss of influence in some areas but then without the UK so will the EU. We will be free to sponsor the initiatives of others and even our vote will be a tradeable tool. The EU will have to ask for our support rather than dictating it - which is very often the case.

Much of Britain's international successes happen in spite of our government, not because of it. Unlike a hundred countries we have no shortage of expertise - on everything from aerospace, agriculture, nuclear engineering and defence. London is a global city that will not lose its global appeal - despite the tiresome wailing of remainers. 

There is one other point though. UK political influence amplified by EU membership is actually not influence. The UKs political inputs tend to mirror the globalist outlook of the EU. It's a very particular groupthink personified by Emmanuel Macron who vomits boilerplate progressive mantras into the international domain. Liberals now pathetically hail him as the new leader of the free world.  

What they haven't clocked is that Macron represents the dregs of a dying order as the tectonic plates of global politics begin to shift away from the sort of hyperglobalisation pursued by the EU. There is a new mood afoot. As Peter Hitchens puts it "Globalization is all about wealth. It knows the price of everything and the value of nothing. Without borders the world will become—is visibly becoming—a howling desert of traffic fumes, plastic and concrete, where nowhere is home and the only language is money".

That is about where I'm at. I do not think the current trends are welcome or sustainable and "free trade" is overrated. It seeks ultra efficiency when humanity itself is not an efficient species and our welfare cannot be distilled to a handful of economic metrics. Again I find cause to quote Paul Embery writing in Unherd.
For 40 years, the nation state found itself caught in a pincer movement, assailed by two kinds of globaliser: on one flank, the economic globalisers in the form of the multinationals and speculators, the totems of neoliberal ideology, with their demands for access-all-areas and reductions in regulations, including controls over capital and labour; and, on the other, the political globalisers in the form of a cultural elite whose brand of cosmopolitan liberalism and internationalism became so dominant within our modern establishment.
The first stood to benefit in the form of greater global clout and increased profits; the second from the advance to their desired destination of a borderless world, in which we all exist alongside each other in a diverse and liberal utopia under the benevolent patronage of assorted wise technocrats. Both groups had little more than the bare minimum of loyalty to the nation.
And therein lies the problem. We have a political class who have forgotten who they serve, and will serve any passing globalist fad, further alienating themselves from the people. Through the EU the UK does get to advance an agenda but it is that same shared agenda - and while those may be shared values of the EU political elites, the people of Stoke-on-Trent and Sunderland think differently.

The globalist elite consensus is one of habitual capitulation and moral cowardice. It only extends goodwill to those who conform to the consensus and joins the ranks of polite society. The bland functionaries working inside the EU, marinated in political correctness, are a product of that culture of conformity and the policies and directives which flow from it are a reflection of that "progressive" groupthink. If that is what it means to have "global influence" then you can keep it.

What we are now seeing, especially in the wake of Brexit is a paranoid liberal establishment, convinced that the recent wave of populism marks the rise of the "far right" when really all we are seeing is the people of Europe rejecting the notion that their neighbourhoods are just transient strips of land to be occupied by rootless bipeds.

In its paranoia it is becoming increasingly authoritarian - ever more keen to clamp down on independent media and police language. Anything to defend their total ownership of the political apparatus. We have now seen countless op-eds about the collapse of the liberal democracy, but it turns out it isn't that liberal and nowhere close to democracy. 

We are told that the West is turning down a dark path, and that the UK is following the USA into some sort of fascist abyss. I just don't see it. I have no particular love of the Trump administration but in terms of the administration's posture it's values are more in line with my own that those of the EU. The USA is no longer going to prop up UN corrupt UNGA agencies nor will it firehose money at Palestinian terrorists (unlike the EU). I'm supposed to hate US Ambassador Nikki Haley. I'm sorry but I just don't. She's ace! The USA is ending decades of liberal hypocrisy. Just for once there is some moral clarity in the West. 

More to the point, the globalist progressive agenda is not without its own bodycount. Aggressive, nay murderous, trade liberalisation policies have ravaged Africa, uprooted populations and killed thousands as they attempt to cross the Mediterranean. The slowness to act, combined with ill-judged military interventions has done more to push Europe down the populist avenue than any YouTube blog.

Personally I see very little point in having international influence in political affairs if our own political class have a value system that is totally alien to the people they nominally serve. If Brexit cuts off our political establishment from that hive of virtue signalling narcissism then we have limited the damage it can do. They said Britain would be an act of self-isolation. This is perhaps no bad thing.

In any case, the notion that we have amplified influence through the EU is not one that particularly resonates. UK castigation of murderous tinpot regimes seldom count for anything, not least since we're selling half of them the weapons to do it. EU sanctions are often useless, totally hypocritical or in the case of Russian gas, completely ignored. The EU has soft power but wields it clumsily and often without unity or clarity of purpose. European solidarity is a myth. 

It is also an extraordinary arrogance to believe that our collective timid bleating constitutes influence. It has not brought an end to the fighting in Syria or Ukraine or accomplished anything further afield. What we're dealing with when europhiles bleat about British overseas influence is actually EU colonialism - as a substitute for a lost empire. This is usually an accusation levelled at Brexiteers and their fondness for the Commonwealth, but in europhiles we see an enthusiasm for bullying the world into following the West's suicidal progressive ideology. They don't seem to have noticed the tide of history.

Tuesday, 25 September 2018

Brexit displacement activity


Being it the Labour conference we are hearing noises about a "people's vote". The legacy remain campaign has successfully set the agenda. Being that the party is not in power, hopelessly weak and is nowhere near power, it cannot be said to be an achievement.

There isn't going to be a second referendum. To have one we would have to put Article 50 talks on hold which is not going to happen. Parliament would have to compel it and Brussels would have to agree to it.

But what would this referendum even be? Would it be a referendum on Chequers versus no deal or Chequers versus Remain? If it's the former then it's a pretty stupid idea because it would be a low turn out and there is a serious danger no deal would win. It it's the latter then it doesn't pass the Electoral Commission fairness test in that leavers would be railroaded into having to support something many do not see as honouring the referendum. Or so goes the narrative.

The only fair and coherent question we could put to the public is really just a re-run of the first referendum which seems somewhat pointless and victory is by no means assured for Remain. As an enterprise, a second referendum was always a bankrupt idea and if by now remain is still unable to provide a coherent framework as to how and when it would be accomplished then it is simply not an issue worth talking about.

If anything we are only having this debate as a matter of displacement activity since neither party is capable of coming up with a coherent Brexit policy and nothing that isn't contradicted by the close of business each day. This is why I am absolutely convinced that, unless the EU has a fudge in mind to kick the can down the road, we are drifting toward accidental Brexit.

What we are not seeing is any attempt to divine a course in reference to what Brussels is likely to accept. Labour is attempting to triangulate a position that will wrongfoot the Tories while also trying to appease the traditional voter base as well as the metropolitan remainer middle class. What Brussels thinks doesn't come into it.

As impossible as that task is the Tories fare no better with the IEA having launched "Plan A Plus", billed as an alternative to Chequers. We only need look at James Delingpole writing for Breitbart to see how they're weaving the narrative. "Chequers means Corbyn" we are told.

He describes how a Corbyn administration means the slaughter of every first born and the seven plagues, concluding that "until this morning, it seemed distinctly possible that the unthinkable might well come to pass. "What changed?" asks Delingpole. "The release of the Institute of Economic Affairs‘ (IEA) alternative Brexit plan – and its welcome by leading parliamentary Brexiteers, is what. You can tell it’s a game changer because all the usual Remainer suspects are pouring scorn on it".

And that there is about the level. Bovine. He hasn't read it, wouldn't know if it had merit, but so long as it triggers remainers then it can do no wrong. Then, according to Delingpole, it is further merited by way of who supports it... Boris Johnson and Jacob Rees-Mogg.

What matters, says Delingpole, "is not so much what it says – you can read it here – as for the principles which underpin it and for the opportunities it offers the Conservative party to revitalise itself on lines which accord with the way the majority of people in Britain think".

That's funny actually, because what I thought mattered was having a plan that could adequately satisfy a number of Brexit objectives while also being acceptable to the EU. Whichever virtues it might signal are, at best, a secondary consideration. As it happens the plan comes nowhere close to satisfying its purpose. The plan is the usual collage of already dismantled nostrums and it shares many of the same fundamental flaws as the Chequers plan. 

But then Plan A Plus is not designed as a serious proposal. It is little more than a political device to wrong-foot Theresa May and to shore up the flagging credibility of the ERG who have done nothing more than snipe without having a plan of their own. Because Breitbart and BrexitCentral readers are gullible and intellectually subnormal they will obligingly pitch in to reinforce the IEA narrative. 

It is interesting, however, to see that there is absolutely zero organic uptake on the #PlanAPlus hashtag. It's a coordinated Toryboy circle jerk campaign for their deadbeat think tank and nobody outside of the bubble is paying it much attention. The reputation of the IEA is already tainted and unless you belong to a particular narrow sect on the Tory party, its author, Shanker Singham, is widely regarded as a fraud.

Being that the ERG and the IEA are not without resources and support they have made an impressive media footprint with this plan, and we can expect ERG MPs to keep battering Theresa May with it, but it can only ever serve as a political device because it sure as hell can't be used as a Brexit plan

None of this, though, is engaging with the task at hand. There is a negotiation underway and the clock is ticking. Our politics is unable to cope with the idea that there might be a third party in this equation. Brussels will not feature in their estimations until they're looking for someone to blame. We will see no discussion of acute issues until it's too late.

Despite all the noise there is actually very little to say about the Brexit process right now. All that matters is the destination - which right now looks like a crash and burn Brexit simply because our politics does not have the coherence for it to go any other way. Our entire political apparatus is indulging itself in their own respective fantasies, each talking past each other while managing to contribute nothing at all of any value. Plus ca change.

What is this Brussels thing?


I'm quite an avid fan of maps. I can while away hours on Google Earth, exploring all the places I will likely never go. This afternoon, though, I spotted an error. I have found something called "Brussels". I have heard rumours that such a thing exists but listening to the machinations of our political class I have been convinced for some time that it does not actually exist.

Theresa May has doubled down on her Chequers plan despite various voices from within the EU telling her it will not work. Then we find the IEA producing a "plan" with the same fundamental errors. All the while we have a piƱata of Labour mix and match policies which again totally fail to take into account that the EU might have an opinion on the matter.

For some time now nothing said by Brussels has made any impact on the national debate so now we have to assume that Google maps is displaying a glitch in the system. Here we are locked into a crucial negotiation that will decide the UK's standing in Europe and the world for the next half century - in what is possibly the most important thing to happen to politics in more than three decades. It cannot possibly be the case, therefore, that Brussels does exist otherwise it would on some level feature in the debate. For once I am willing to conclude that I alone am the one in error. This thing I see before me is but a mirage.

Friday, 21 September 2018

Doubling down on madness


Theresa May has doubled down on her Chequers insanity in what is probably the most breathtaking speech thus far. She has dismissed any EU version of a Northern Ireland backstop while once again closing down the EEA avenue. "Here, the EU is still only offering us two options". said May.
"The first option would involve the UK staying in the European Economic Area and a customs union with the EU. In plain English, this would mean we’d still have to abide by all the EU rules, uncontrolled immigration from the EU would continue and we couldn’t do the trade deals we want with other countries.
That would make a mockery of the referendum we had two years ago. The second option would be a basic free trade agreement for Great Britain that would introduce checks at the Great Britain/EU border. But even worse, Northern Ireland would effectively remain in the Customs Union and parts of the Single Market, permanently separated economically from the rest of the UK by a border down the Irish Sea.
Hitherto now May has been content to trot our mealy mouthed rejections of the EEA but this week has gone all out to smear the option and has joined the ranks of her ultras in lying about it in totality. It is, therefore, a dead option under this prime minister. The second remark eliminates all known legal solutions for a backstop which takes us further away from concluding a deal. 

The core dishonesty here though is knocking the ball back into the EU's court. It was always for the UK to present a workable proposal and despite having been warned on a number of occasions that the single market is indivisible May has time and ignored what she is told. She is washing her hands of any responsibility. 

In one spectacularly ill-judged statement Theresa May has destroyed anything we might consider progress and the goodwill that goes with it. If we were nowhere yesterday then we really are nowhere today. Barring a miracle fudge in the final hour it now looks less likely than ever that we will leave with a deal. Theresa May is going down in history as the PM who wrecked Britain.  

Thursday, 20 September 2018

Why we are in this mess


The greatest mistake for this government was to ever believe it was entering a negotiation with the EU. David Cameron proved in his attempt at renegotiation that the principles of the EU are inviolable and if that was true for a member in 2015 then it is true now for a soon to be ex member. It is a creature of rules and systems and you only really get to choose your mode of interface with it.

In designing a plan you have to understand what the respective systems are and why they exist - and when you do it becomes clear why the EU is not open to compromise. The single market is essentially a firewall protecting a regulatory ecosystem designed to raise standards and maintain uniformity throughout for the free exchange of goods and services. Divergence very obviously must incur penalties.

Once you acknowledge this reality you have a better stab at designing a plan. When the EU says no cherrypicking it means no cherrypicking and it pays to take them at their word. For whatever exceptions we can point to they are fudges and workarounds but nothing that could ever serve as the mainstay of a UK-EU relationship.

The next jobs is to look at what we actually need. Since much of our trade is actually a product of the single market made possible only through common regulations and frictionless borders it tends to point to the fact that an FTA is insufficient. That leaves us with the EEA and not much else.

If you are a Tory policy wonk, however, and a superior breed, none of this matters at all. The foreigners will bend to our will and when they say no cherrypicking they don't really mean it. Of course they will give us a deal and of course they will let us do as we please. Why wouldn't they?

So on the one hand we have supremely arrogant Tories and on the other a clueless media only too happy to regurgitate the mythology about the EEA spread by the various remain inclined think tanks. The well is poisoned and we are imbued with the belief that EU and international law can take a back seat for the sole benefit of Britain.

But then there's the politics. Theresa May is a creation of EU era politics where politics isn't actually in charge of very much and that which does function only does so because the running of it has been farmed out to EU regulated quangos. Rarely are there decisions to be made of existential importance and all that matters is preserving party unity. Enter Chequers.

As it happens, as a Brexiter I could tolerate the Chequers proposal. It's more than an FTA but less than the EEA and it attempts to reconcile the border dilemmas. The problem, however, is that it pays no regard to anything said by Brussels and it violates the EU prime directive of preserving the sovereignty and integrity of its internal market.

May has attempted to deliver regulatory sovereignty and frictionless trade which simply is not possible. She has attempted to address the issues but is primarily concerned with keeping her backbenchers at bay. She has failed miserably. Chequers is little more than a triangulation between her self-imposed red lines and the problems at hand while trying her best not to lose the next election and to keep her job until Brexit day at least.

Now that Chequers has been torpedoed yet again May really ought to go back to the drawing board - but she won't because she has nowhere to go. The EEA is her only way out but she has soiled her own nest in claiming that the Norway option requires a customs union while accepting all the rules.

This mythology surrounding the EEA is about as old as Brexit itself - with these myths mainly spread by remainers such as Charles Grant, Jonathan Portes and other such pathological liars. It is a mark of their success that this mythology should have been adopted by the Brexit ultras post referendum. This, though, would not have happened had we a functioning media.

Being that the media no longer retains in house knowledge it looks to quotable sources whereupon it takes on trust that which it is told by those with prestige. "Research fellows" or professors are taken far more seriously than anyone ever should. There is no attempt to verify what they say - especially if they are remainers and there has never been a substantive debate as to how we could use the EEA to great effect. Even recent converts to the cause like Nick Boles have got it badly wrong.

With Chequers now lying in tatters, remainers will be more keen to suppress any debate because this impasse suits their narrative that Brexit simply isn't deliverable. The ultra Brexiters will play the same game because the "intransigent EU" narrative works in their favour with many now believing the EU will refuse any proposal.

More astute observers now believe as I do, that Mrs May has known for some time that Chequers is a lame duck but is going through the motions to at least keep up the pretence of a sincere effort. This is very likely theatricals and May has likely given up any hope of reconciling the demands of the EU and those of her party.

Chequers is ultimately the product of a refusal to face reality but also a nexus of Tory advisers who haven't understood the brief and think they know better than everybody else. Even the centrist think tanks have wasted our time floating third way proposals largely for self-gratification and publicity. Anything but address the issues as we find them.

When we do leave without a deal not one of these individuals or organisations will take responsibility for their misdeeds and self-indulgence. We will see a souring of relations with the EU as the entire Westminster establishment attempt to blame the EU when the EEA was there for the taking the whole time. Brexit didn't have to be an omnishambles. The pain we will go through will more be a consequence of Tory arrogance than leaving the EU.

Chequers est mort


So Chequers is dead. Again. Today the EU has come as close as they will ever get to explicitly ruling it out. The line is still that "there are elements we can work with" which I assume to be the preface and the ring binder it arrived in.

Meanwhile I've been busy with a model of a Russian T62 tank that has come out very well indeed. I know I'm supposed to be blogging Brexit especially when there is such a flurry of activity but activity is not productivity - and though we've seen volumes of copy produced in the last forty-eight hours we are still in the same place. There isn't a workable plan, May still doesn't have an alternative to the Irish backstop, the EU hasn't softened its line and the same basic principles still apply.

What also hasn't changed is that Mrs May is not listening to anything she is told. She will go on ignoring anything said by Brussels and will continue to hold Chequers aloft as the only way forward until we reach a full blown crisis.

Reaction to the non-news that Chequers is dead has been entirely predictable, with the Tory party now urging May to pursue a Canada style FTA while the remainoids bleat that any version of Brexit is undeliverable - with both sides ignoring the EEA elephant in the room. Both sides have a vested interest in ensuring it is politically non-viable.

Beyond that there is nothing to report. We were nowhere yesterday and we are nowhere today. There's the usual chatter about a second referendum that isn't going to happen but that is mostly displacement activity and to pass the time of day until something interesting happens. I feel more inclined to clean behind the fridge.

Tuesday, 18 September 2018

Brexit delusions repackaged for the USA are no more likely to succeed


An alliance of American and British free market think tanks yesterday launched their flagship template for a free trade agreement between the US and the UK. It styles itself as a "free trader's" ideal. From the get-go it erects a straw man.
Real free traders may consider the notion of an ideal free trade agreement oxymoronic. After all, real free traders are most concerned about eliminating domestic barriers to trade, whereas trade agreement negotiators consider those same barriers to be assets. Free traders seek the removal of domestic barriers, regardless of whether other governments promise to do the same; we understand that the primary benefits of trade are the imports we obtain, not the exports we give up. 
This is quite typical of the think tank breed. Everyone who works in the discipline of producing free trade agreements is not a "real free trader" by their definition - and conventional wisdom must be casually swept aside to make room for their inspired radicalism. Here we see the belief that "real free traders" do all they can to unilaterally remove barriers as a matter of course and this of itself is a universal good with automatic results.

The process of trade, however, is very much the process of coordinating commitments to reducing barriers to trade. These barriers can be of varying nature where domestic governance systems may cause bureaucratic costs and delays where the only way to eliminate that barrier is either to eliminate the governance system entirely (which assumes these systems do not exist for a reason) or to work with trade partners to enhance the compatibility of systems, preferably working to common standards be they data conventions or product standards or even just the standardisation of forms and processes.

Naturally this means if there are radical systemic changes to be made to trade governance systems, it usually falls upon the junior partner to align with that of the larger party. In this instance the USA has the leverage as the regulatory superpower. It won't lift a finger if it doesn't have to - especially if it does not see us as an equal - which it doesn't. This is the regulatory gravity effect. Trade 101.

Like all "real free traders" any stab at a trade policy means bending the definition of free trade to meet their own dogma. Here is where we see some of the Minfordesque unilateralism creeping in.
Free trade is a condition characterized by the absence of trade barriers. Establishing the most important conditions for free trade - the elimination of domestic barriers - requires no formal agreements between or among governments. It is misguided to believe that the economic freedom of people living in one sovereign nation should depend on the consent of a foreign government. But the benefits that accrue to producers, workers, consumers, and taxpayers when their own government eliminates or reduces its own trade barriers - regardless of whether a foreign government agrees to do the same for its citizens are ample and well-documented.
The assumption here is that two nations each taking their own domestic measures can eliminate trade barriers without reference to what each other is doing. This is a conceptual fallacy we have seen before from one of the reports authors.


As it happens, for the last twenty years the entire edifice of non-tariff related activity in the realm of intergovernmental trade talks has been around the establishment of common standards because that above all reduces barriers and, in fact, differentials in regulatory approaches are the chief barrier to further trade liberalisation between the EU and the US.

It is interesting, through, that the report sets up the straw man concept of unilateral removal of trade barriers. It sets the stage nicely for the recurrent "mutual recognition" hobby horse that appears no less than twenty nine times in the report - which tells us that the lead contributor on regulatory affairs is one Shanker "snake oil" Singham of the Institute for Economic Affairs.

Mutual recognition appears to be an obsession of the Tory "fwee twade" set because it presents itself as the magic bullet for frictionless trade while retaining regulatory sovereignty. It is embedded in the script.

There is, of course, a reason why the EU finds it difficult to forge a comprehensive trade agreement with the US. The regulatory cultures are fundamentally different, which reflects in the way regulation is written and enforced. Mutual recognition simply would not work and the Americans would regard it as a huge back door into their regulatory system, with profound sovereignty implications.

Basically, it means surrendering the right to set domestic product standards. The US would have to accept whatever the UK decided was appropriate and the chances of Congress agreeing that are precisely nil. If they they won't do it for the EU then they won't do it for us either.

More to the point the US is doing exactly what the EU does in its own backyard. It uses trade agreements to export its own standards and make its own regulatory demands - much like we see in the TPP agreement. There is no reason to expect it will make an exception for the UK.

Here we see a particular Tory delusion that imagines there is a special relationship with the USA. There are occasionally warm diplomatic words toward the UK, particularly from the ambassadorial branch since we tag along with US military adventures, but when it comes to trade, America has always operated an America First policy and Donald Trump will be no different even in respect of the UK.

The report has a similar approach to the Tory approach to Brexit in that complex problems can be eliminated at the stroke of a pen by clever rhetorical devices. They sound superficially plausible and even credible to the uninitiated but I suspect I am not the only trade geek reading this report and rolling their eyes.

It would take considerably more of my time to dismantle the entire report which is scarcely worth it since the publication of these reports are usually only for the greater glory of their authors, launched to a fanfare of media coverage on a slow news day with accompanying favourable poll and then a day later it is completely forgotten. We will, though, see a regular repetition of themes filtering into the debate over time, one of which will be a redefining of the concept of a free trade deal. It's easier to shift the goalposts when you re-programme the language. Take a look...
At the outset, it should be made clear that free trade and FTAs are not the same thing. Free trade is about the freedom of people to transact as they wish, when they wish, with whom they wish, and without politicians and bureaucrats as gatekeepers. Free trade is about removing impediments that benefit some at the expense of others so that each of us individually has the fullest battery of choices to decide how best to use our own resources. FTAs are really more about managed trade, which often includes labyrinthine rules intended to distribute particular benefits to specific interests. In some respects, FTAs give free trade a bad name. However, despite their flaws, FTAs have helped reduce domestic impediments to trade, expand our economic freedoms, and lock in positive reforms. Over the years, FTAs have delivered freer trade.
They are, of course, right in that free trade agreements are not free trade and were it not for the ill defined language of the WTO we would still be calling them by their proper name... Preferential Trade Agreements. Far from being free trade, they very much are managed trade - and for good reason. Here we get an insight into the mindset of "real free traders".

They say "Free trade is about the freedom of people to transact as they wish, when they wish, with whom they wish, and without politicians and bureaucrats as gatekeepers". That is the end point. That is where we want to get to - but here we have to ask how we get there? And that is why we have "politicians and bureaucrats" - not as gatekeepers, but as facilitators who, through coordinated activity, can eliminate the many non-tariff impediments to trade. Describing them as bureaucrats implies they are parasitic rather than central to the process.

But then trade and commerce is not devoid of politics. What drives trade, as much as anything, is the desire to create a level playing field. A typical example being a global drive on labour standards in international waters to ensure that our own fishing vessels are not undercut by foreign operators using filipinos on slave wages.

Typically labour provisions without surveillance systems are very often of little observable value and generally only a figleaf, but in some sectors like fishing, such standards are enforceable and there is the political will to do so. These are the sorts of complications that turn "free trade" into managed trade.

In addition to this we add layer upon layer of complexity as we try to monitor, define and tax trade in services while protecting intellectual property rights on goods and digital content. The free trader imperative for simplifying trade is wishful thinking. Modern trade beyond the shipment of tins of tuna is inherently long-winded, complicated and time-consuming. There is no simplifying it much though we may wish we could. 

Moreover, as "real free traders" fixate on cutting tariffs and deregulation, very often the focus is on improving the profitability of already maximised value chains by eliminating fraud, counterfeiting and food adulteration by improving regulation. The core element of any transaction is trust and complex FTAs go a long way to establishing systems that buyers can place their trust in. That is the inherent value of regulatory systems. Eliminating those such overheads can do more than a substantial cut in tariffs, many of which are already negligible.

Where things get interesting though, is that for every value chains distortion a preferential agreement eliminates, it can always create more. Modern trade agreements have measures against preference erosion which can mean an FTA is actually entrenching inefficient value chains. This is why FTAs are often described as termites in the trading system, undermining multilateral efforts. In fact, it is hard to support the authors claim that they seek to be radical when they are still thinking along the lines of comprehensive bilateral FTAs.

Here we need to look at the successes in recent years in achieving incremental progress on a multilateral basis. Global regulations from the IMO and UNECE have created platforms we can build on which can over time eliminate the regulatory differentials between large blocs and countries ensuring that we are not forced to choose which regulatory superpower we have to bend to. The more granular such systems are the more likely they are to succeed, but even individually can add billions to global trade. The holy grail would be a global medicines approval system.

What this report is, though, is a series of well worn and timid free trader canards marinated in free market dogma seeking to bend reality to obsolete ideology - particularly "free trade" with none of the external obligations that go with modern trade. I would expect nothing else from this particular nexus of think tanks since they are all interchangeable in ideas and personnel.

As it happens, I sincerely doubt we are ever likely to see a comprehensive FTA even though the political will may be there. It has to be ratified on both sides right about the time when fondness for the hard right fantasies of the IEA et al are rapidly going out of fashion. Such a deal is never going to be a substitute for the single market nor will a deal based on "mutual recognition" delusions ever come to fruition. First and foremost it will depend on the regulatory commitments made to the EU and it would be impossible to scope such a deal until we know what the EU relationship looks like.

Provided the UK does not make a monumental mess of the Brexit process there is every reason to believe it will remain a fairly wealthy country, but if it chooses FTAs over multilateralism we must get used to being only a mid ranking power and not a priority for many of the larger economies. Being that the case we are better off waiting for the EU to conclude a deal with the USA and find ways to plug into that. We must look at trade tools available to us beyond FTAs taking as read that our room for manoeuvre on regulations and tariffs will be slender should we wish to maintain our current trade volumes with the EU.

That is not to say the UK is without assets and opportunities, only that we have to develop our regulatory diplomacy abilities making use of international mixed alliances in standards forums and international organisations. Instead of a regulatory race to the bottom we should seek to raise standards for all and use an integrated trade and aid policy. We are not without allies and we can lead sectoral alliances which can rival the EU dominance. We cannot, though, bet the farm on an erratic and self-interested player like the USA and it would certainly be unwise to put our faith in the ideas of scripture driven think tanks who refuse to see the complications in the world as we find it.

Monday, 17 September 2018

Waiting for reality

I have never been described as a quiet person. Being a somewhat large Yorkshireman, it is difficult not to be noticed. I am also one who has plenty to say most of the time. Not so at the moment. I am beset by a quietness of the mind and one does not speak simply for the sake of speaking. All I can really write about is how little there is to say.

Last month I managed to clock up forty three blog posts which is unusually high even for someone as prolific as me. This month, though, I seem to be mute. There are groans and creaks in the Brexit world but nothing I would consider a reportable shift in dynamics. We are counting down to conference season where the politics is tribal and tedious and all we are likely to see is politicians broadcasting their stances to the party faithful. Dull as dishwater.

The only thing especially outstanding this last week is the frantic tone of the remain brigade who have launched yet another new campaign attracting another hundred thousand pounds through crowdfunding. It is yet more tone deaf elitism from Gina Miller, launching a full scale NHS love-in. It would struggle to be more tiresome.

It actually tells us quite a lot about the Westminster bubble. Whenever they feel the need to connect with the plebs they make noises about threats to the NHS as though that were our sole preoccupation. It was annoying when Vote Leave did it and now now Remain doing it is comical. It tells us that they still think the referendum was won by a big red bus.

One could be a little more animated were this in any way a credible threat to Brexit but I have long felt that we have crossed the event horizon, we are leaving and it has taken on a life of its own. Attempts to influence events have proven futile so now we just watch and wait to see what comes out of the oven and in the meantime chart the non-stop debasement of our media.

If there is one advantage to having a spell of inner silence it is that one has a heightened zen like awareness of what is actually important - and the way I feel at the moment, very little is. Twitter is an interminable feed of cliche and trivia and entering pointless spats with remainers is not a productive use of time.

It is reported this morning that EU officials have been busy redrafting the Northern Ireland backstop, but this is likely to be be fudging the matter just to help Theresa May sign any withdrawal agreement. May could likely chalk it up as a big win as she folds in the final hour. That's how they play it. It is, though, nothing to get terribly animated over.

The only way to derive any sort of entertainment value is by entering the Tory alternate universe where Chequers is an actual thing and one picks a side in a battle royale between two equally impractical and unworkable ventures. Addressing the issues is the very last thing the main parties wants to do - which is just as well since the lack any and all capability. The big question, the one I am waiting for, is what happens when politics returns to planet earth and Brussels says no... again. Will it sink in or do the Tories carry on in denial until it's too late?

Thursday, 13 September 2018

Losing the thread

Every now and then then I lose the thread of Brexit because there's so much noise it's difficult to work out if there have been any developments and then when something finally does happen it takes you by surprise because usually what the people who write the news think is news is not actually news and the only real news is that there have been no developments.

The main development today seems to be that there will be no new negotiating mandate given to Barnier by the EU27 but that is only really news people who expected they might, which in the main was media speculation born of their own ignorance. Since I never expected it to happen it wasn't something to watch. 

Meanwhile for all that we have heard much noise from the ERG and Dominic Raab, one gets a sense that we are simply treading water - winding down the clock to that final hour where the decisions must be made. The rest is little more than propaganda noise to hold the fort. The drip of no deal warnings has become a torrent - while Brexit activists continue to grunt "project fear" despite businesses starting to vote with their feet.

In the background we continue to see Tory MPs running with the "Chuck Chequers" meme, referring back to Lancaster House - either pretending a Canada FTA is on offer and there for the taking, or simply not understanding why an FTA is wholly inadequate to our needs. The public debate on Twitter is in the paddling pool and the remainers are really only talking to themselves pushing for a referendum that simply isn't going to happen.

In all this, one simply doesn't bother looking at newspapers for information. The only reason to look at them is to get an idea of how the media is misinforming the debate. It doesn't help either that insomuch as I am catatonic with Brexit boredom, the rest of the nation is as well. I notice my Facebook feed is discussing just about everything but Brexit. Right about the time when we can't afford to have people tuning out.

This is as much to do with an overall sense of bewilderment because the even the most basic technical nuances of trade don't filter through to reach Mr and Mrs Average. Last weekend I had dinner with friends (yes I have some) over in Reading. Joining us were a couple of ordinary senior citizens, both of whom voted remain, but not especially political, remarked that they thought the EU seemed to reject anything the UK presents.

This, I expect, is probably the common perception and though the Tories may be lying to our faces about EU intransigence, it is a highly believable narrative and one that is not easily dispelled without explaining the finer details - which is beyond the understanding of Mr and Mrs average. Being that it is impossible for most people to know what is and isn't true out of all the warnings people are left to take their best guess.

Here it is easy to see how the ERG is losing ground. If even half of the warnings are true, and most of them are, then there can be little appetite in the country for no deal. As the clock ticks down we will see a new urgency. Whether it has any bearing on the outcome is anybody's guess. This government has been deaf from the beginning and there is no sign of change.

Wednesday, 12 September 2018

Modelling the future


Every now and then I need a few days off from blogging to do something else entirely. This week I decided to drag out a stack of hobby kits I've been meaning to build for the better part of a decade. That was a mistake. Being an obsessive, my living room is now almost entirely devoted to the production of model tanks and aeroplanes which I think is the reason I gave it up to begin with. Like Brexit, anything I do becomes all consuming to the exclusion of everything else.

I had hoped that with a few days away from it all I would gain some perspective or have something original to say. Blogging Brexit is seriously hard work when all has been said and we are just waiting for some kind of coherence from those in charge of it. There's only so many times you can churn over yet more of the same dismal nonsense from the ERG and there wasn't any point deconstructing the Economists for Free Trade because they haven't come up with anything at all new.

It would seem this week, however, the ERG is on the wane with signals they are going to shelve any plans to de-throne Theresa May. Their cupboard is bare policy wise and since Mrs May is lumbered with all the difficult choices it serves them better to let her carry on until Brexit day and let her carry the can for whatever abortion of a deal we get. Assuming we get one that is.

Right now the odds are back to fifty-fifty on that. The EU must realise they are not yet ready for a no-deal Brexit, so with Mrs May in the clear they might throw her a lifeline and offer only a vague political statement in place of a trade framework. That gets us as far as a withdrawal agreement if nothing else.

Beyond that, absolutely anything could happen as it dawns on the powers that be that many of the "no deal" problems are not solved by a withdrawal agreement nor are they addressed by way of a basic FTA. Whoever is in charge by then will have to grapple with that question where finally we might get a sensible debate about the EEA. Tone from Brussels may also change with a withdrawal agreement in the bag.

There is also the danger that tone from Brussels will harden after exit day since by the time the transition is over, most of the problems will be entirely our problem and not at all theirs. Again, thanks to the complete absence of a plan, we can only speculate.

Here, I suggest those involved take a little time out to build a model of their own. It teaches you how to think and plan. As I have discovered this week, you have to understand what it is you are building, study all the components individually, break the job up into task and ensure you have all the materials you need before you start work. You also have to be mindful that though you have all of the necessary components, even with the best of intentions it is not going to look anything like it does on the box.

With Brexit, they have no idea what they are building, don't know what the pieces are for, they're attempting to do it all at once and they think it's going to look better than it does on the box. They've been sniffing the paint thinner and inhaling the glue fumes.

The secret to a good model is preparation and technique. It really doesn't matter how hamfisted you are just so long as you stick to the plan. Like the Joker from Batman says... Nobody panics when things go according to plan even when the plan is horrifying. There also comes a point when you have to admit that what you're doing isn't working and it's time to reach for the paint stripper.

Sooner or later Mrs May will hold her Chequers plan up to the light and see that no amount of touching up or varnishing is going to make it any less of an abortion.

Thursday, 6 September 2018

IPPR: the report that nobody's talking about


The Institute for Public Policy Research think tank has published a report on economic justice. Proposals from the IPPR formed much of Labour’s agenda under Tony Blair and Gordon Brown when it took office in 1997 and has continued to influence Labour policy. In recent times even Theresa May has stolen their clothes.

As is the way with these things, because IPPR is in London and it being silly season (now all year round) the report has received full spectrum media coverage. Much of it is devoted to telling us how important they are, attracting patronage from such luminaries as the general secretary of the Trades Union Congress, Frances O’Grady; Legal & General fund manager Helena Morrissey; the head of the City of London Corporation, Catherine McGuinness; Dominic Barton, McKinsey’s Global managing partner; and Mustafa Suleyman, co-founder of artificial intelligence firm DeepMind.

For it to get noticed by anyone in the bubble it has to be leaden with prestige. The media will not cover it otherwise. If you have prestige you can publish virtually any old toss and high society will lavish it with praise. 

The report itself is an amalgamation of centrist talking points on anything from a national investment bank, increased public investment, a social dividend (whatever that means), expansion of collective bargaining, worker representation on company boards etc. Milibandian in its blandness.

The report immediately nosedives on page thirteen where it tells us "We have not taken a position on Brexit; our analysis shows that the UK’s economic problems are of long standing". I'm not at all sure how you can set about an economic master plan without Brexit being a central theme. Everything investment wise will hinge on the Brexit outcome and our future trading relationships.

Very often in the Brexit debate you will find remainers observing that we could be doing so much were we not tied up with Brexit and if you asked them what that would look like, they would produce a report much like this in the belief that Brexit is primarily a consequence of economic injustice. Far from being radical what we are actually looking at is business as usual thinking from roughly the same people who brought us to this point to begin with. 

Some of the proposed reforms include:
  • An immediate increase in the minimum wage to the real Living Wage of £10.20 in London and £8.75 outside the the capital.
  • A requirement that workers on zero-hours contracts be paid 20% above the higher real Living Wage rate.
  • An industrial strategy to boost the UK’s exports, backed by a new national investment bank that would raise £15bn a year to push public investment to the G7 average of 3.5% of GDP.
  • Major changes to how UK companies are governed, such as: enshrining a broader purpose in directors’ duties; the inclusion of workers on company boards; a rise in the headline rate of corporation tax and a minimum rate of corporation tax to tackle tax avoidance by multinationals.
  • Taxing work and wealth on the same basis, with a single income tax for all types of income (meaning the abolition of capital gains tax and dividend tax), and the replacement of inheritance tax with a lifetime gift tax, levied on recipients rather than estates, which would raise £9bn a year.
This is pretty pedestrian stuff along with all the tedious nods to renewable energy and smart grids. This is all generic manifesto fodder that pads out the prospectuses for all of the major parties, and activists will dutifully adopt such talking points as an when is required of them. Original it is not. 

And that is the real poverty in the UK. It is a poverty of ideas. What we see here is the uninspiring managerialism of the establishment that wouldn't know radicalism if it bit them in the face. That as much as anything is the reason many voted for Brexit. Straight off the bat most of these ideas are swept out of the realm of possibility by Brexit, not least because, if it goes the way we think it's going, we'll be broke. 

As for things like workers on company boards, this measure was met with confusion and puzzlement when announced by Theresa May. Nobody knew what the policy was designed to address or what it even solves. As to tinkering with minimum wage, again Brexit puts a huge question mark over that, but there are more serious issues with it. If London requires a high rate then that is directly related to the cost of housing and transport, in which case we are tackling a symptom, not a cause. 

In tackling housing costs we need to look at the artificial floor price created by housing benefit, and we also need to look at demand, which may stabilise depending on our future immigration policy. More to the point, though, we need to look at de-londonising the economy and encourage more home working. This can be done with tax incentives and if you can get people working from home even one day a week then that is a 20% reduction in infrastructure costs. 

The report mentions a number of measures to deal with low pay and zero hours contracts but again these are reactive measures that fail to address how we got here to begin with. Several years worth of regulatory incursions have gradually strangled labour market fluidity where we could very well do with substantial liberalisation of the labour market. Making it easier to hire and fire is good for workers. I would quite happily dump the EU Agency Workers Directive.

The report then latches on to the notion of a "green industrial strategy" which ultimately means choosing expensive intermittants for the sake of creating jobs while sending our bills skyrocketing and increasing energy costs for business. This is then met with daft suggestions for an energy cap which Corbyn and May alike have alluded to. This is the prevailing mindset in the Westminster establishment. Their policy proposals are nearly always reactive measures to deal with problems they caused. Investment banks etc proposed by government are not going to solve anything. All it does is entrench the quangocracy we already have, creating boondoggles for tier one consultancies. 

What is actually needed is a total reboot of political thinking because the mindset we see here is the command and control mentality that has been with us all of my adult life - and one that has totally destroyed local democracy and bureacratised government to the point where most of what it spends is on self-administration. It is the mindset that believes we can legislate our way to prosperity, where spending on vanity projects is "investment". This is the fundamental problem and the likes of IPPR cannot solve the problem because they pretty much are the problem. 

This is, in part, why I voted for Brexit, precisely because it will demolish the ambitions of spreadsheet sociopaths and it will force government to do less and reduce its capabilities. The resultant fallout will mean more people have to do things with their own resources - releasing a lot of zombie capital in the process. Only something disruptive like Brexit can possibly reset the mode of thinking in the bubble as they are forced to adapt to a wholly new dimension in government. 

Being that the UK will be repatriating a whole tranche of law and domesticating it, they will find that a number of systems can no longer carry on as before and will have to do the same with fewer resources or not at all. Here is where government will have to find ways to engage the private sector and civil society, which may very well reboot the voluntary ethos that New Labour destroyed.

If we wanted the sort of top down policy making of IPPR we could just as well have stayed in the EU in that this is what the commission does and would have gotten round to all this stuff eventually anyway. What we are not going to get from the IPPR or the Westminster bubble in general is any kind of new thinking because they have ultimately forgotten how to think and there is no mileage in doing so. 

Publishing these reports is their bread and butter. Every once in a while they need to raise their profile to get the donations rolling in so all you need is a glossy PDF packed with all the favoured talking points of all the usual suspects, plastered with all the affiliated logos and you have your day in the media spotlight. Since you don't need to produce anything original or groundbreaking, why would you even go to the expense and hassle?

More to the point, with a report running over three hundred pages, nobody is going to have the time to read it, let alone absorb it in time to publish thorough analysis, therefore whatever passes for analysis will be the result of a quick skim of the executive summary and those praising the report will do so by triangulating against whichever prestigious name has put their credentials to it - ie, whichever establishment drone wrote the foreword.

In fairness, it's not just the IPPR. It's the whole edifice of think tankery. This is the business model throughout, perpetuated by a coprophagiac media for whom these reports fill air time and column inches. IPPR will be slapping themselves on the back this weekend for a job well done and by Monday nobody at all will be talking about it. One or two recommendations will find their way into political discourse but nothing original and certainly nothing realisable. 

This is the Westminster bubble culture that has taken root over many years, where its PPE denizens will trade factoids and nostrums, none of which solve any problems I actually have, and nothing I would go out of my way to vote for. Being that the parties are empty shells with no research capacity of their own and no consultative policy mechanisms, come election time they will sift through the work of IPPR to provide a veneer of social concern. It's all disposable, interchangeable, recyclable churn fodder mainly to keep wonks in political nonjobs. 

The consequence of this is an out of touch politics, unable to inspire the voters or win their confidence, leading to exactly the sort of anti-establishment protest vote that brings us where we are today. If we really want a new Britain then we need new politics broken out of the Westminster circle jerk. That can only come from real local democracy and inverting the power pyramid.

The IPPR alludes to this, but it centres on creating new bodies such as a "new National Economic Council. Based on the principles of partnership and consultation, we argue that the Council should be the key mechanism to secure greater coordination between central government and the devolved nations and regions, and between government and business, trade unions and civil society. Partnership of this kind has sometimes been scorned in this country. We believe it to be essential if we are to transform our economy on the scale required".

Again this is quangocracy. Their mindset throughout is based on creating structures and hierarchies and systems of micromanagement and interventionism. It is beyond them to envisage a society without them as our political masters. Bringing about a fair society involves state intrusion on every level, creating economic justice nonjobs and interfering with commerce. This is Blarisim 2.0. 

Meanwhile, back in the real world, what I could really use is a cut to VAT on the things I buy, a cut to petrol tax so I can do more, deregulated labour markets so I have choice in who I work for, a cut to income tax so I can go on holiday, and a lot fewer quangos with a lot fewer CEOs on salaries exceeding that of the PM. 

Beyond that, we need reform of just about every branch of the state, but that's going to require a lot of tough and unpopular decision making that the likes of IPPR (and all the major political parties) won't touch with a barge pole. Since they won't, we have forced the issue by voting to leave the EU. The IPPR doesn't have any answers to speak of and we'll be waiting til the end of time for anything radical from the Westminster bubble. Radical thinking is far beyond their ability.