Finding a Unique Selling Point

Time has flashed by since I wrote my last version of my “Theory of post-industrial economics” (Revision 6 — 24 January). It’s short enough (about 2,000 words) for any theory on a complex subject and I’m hoping that, one day, I’ll be revising it and extending it somewhat to be a book chapter

Nevertheless, no theory worth its salt should not also be easily described on one sheet of paper. It is only then, as sales people are taught, that it might have a USP (Unique Selling Point). Well, in the eight weeks since Revision 6, nothing like a USP has yet emerged. But I’m down to three main elements and I thought it might be a useful exercise to write these three as succinctly as I can — yet still makes sense to the lay reader — and see what happens.

If I write three paragraphs of no more than 50 words each then that ought to qualify. In fact, as i was writing the previous sentence, it occurred to me quite strongly that one of the points may be the USP, so I’ll leave that till the last. Here goes:

1. According to the Principle of Least Effort, all mechanical systems will find their own equilibrium. As Richard Feynman once said: “Don’t ask me how or why this happens. I don’t know — nor does anyone else.” As intermediary mechanical systems themselves, governmental economists can’t alter inevitable outcomes. Their minds are also bound by the laws of physics.

2. The growth of intelligence is built into all life forms from bacteria through to advanced mammals. It has developed in man to a high degree. Even more so in the most economically advanced countries, intelligence is now marginally increasing in the upper middle-classes as a viable self-breeding sub-population now separating itself from the masses that are now declining in numbers towards possible extinction.

3. The industrial revolution was impelled by human greed and exploitation initially but was subsequently sustained by populist aspirations for status goods. It cannot be expanded all round the world. It was a one-off historical period. The upper middle-classes in advanced countries will continue to prosper quietly as the owners, supervisors and software creators of automated systems making advanced products and services.

That was tough! Try as I might, I’ve had to enlarge to 60 words per paragraph. Does the last paragraph amount to a Unique Selling Point? I’m not sure yet.

A bird’s eye view to be considered

Economists are not normally trained in thermodynamics — the science of putting energy into some economic activity and taking usuable energy out. So when the future production of consumer goods for 7.4 billion people — up from the present 1.4 billion in the advanced countries — are debated then economists do not realise that the energy that would have to be put in every year would have to be raised five-fold from present inputs.

If the further 4 billion or so of young middle aged poor people are going to survive to old age then the world population would rise to 11.4 billion by about 2050. In that case then the energy required would need to be raised seven-fold from present levels

This is the bird’s eye view of the world economy.

Redundant banks

Capitalism — which is only a synonym for ‘the industrial revolution’ — or the product of widely aggregated savings — is now folding up for two highly correlated reasons.

The first is that people in the advanced countries are increasingly distrustful both of the probity of the financial sector and the competence of governments in maintaining the value of money. Because of this, people are not saving as they ‘ought’ to be saving to keep economic growth going, nor that pensions, whether private or state — both with black holes in them, actuarily speaking — are going to be worth much in future years.

Some would say that this is a temporary phenomenon due to the 2008 financial crisis and that, with care, and austerity budgets for the next 20 or 30 years then all will be well again — at least in the advanced countries.

But the other reason which makes this unlikely is that there are no more high-class status goods available to be mass produced — thus neutralising any incentives people used for hard work and hard saving. There is only one imaginable consumer good left which is not yet available and this is the family helicopter or family airplane. And the reason we can’t have those is the same reason as we can’t all have beautiful mansions in the countryside. There isn’t the space — in this case, airspace.

The investment in growth industries of today — education and health care — with a wealth of innovation to come — is not going to come from one-off investments from the aggregated savings of millions, but from individuals for the benefit of one’s children or oneself. The post-industrial era is going to require a quite different pattern of investment and financial circulation.  the institutions of commercial banks, investment banks, and central banks — as we know them today — will probably not be part of it. Maybe the unregulated ‘shadow banks’, already turning over more money than the regulated ones, are already taking over.

Intensive competition between advanced countries

The mass immigration of 60 years ago of relatively unskilled people ago into England — and the acceleration in the last 20 years — has had two effects, one obvious, the other far less so.

The obvious one is that immigrants displaced poorly educated indigenous young people from jobs and also swelled the proportion of low-skill businesses and services in the country. Most of the latter are of the non-added- value sort — merely circulating money and services among themselves within an expanding population. The result of this is that most of the population are importing more goods and services than they are exporting and are largely the cause of the negative balance of payments of the last 20 years..

The much lass obvious effect is that among the millions of low skill immigrants there are, as always within any population, a small proportion of children born with very high intelligence. These are already beginning to dominate indigenous children at school and will soon start to do so at university. These graduates, particularly those in the sciences, will be welcomed by the upper middle classes.

The latter — already prospering wih a positive balance of payments from their international trading — have already realised that their future depends on being at the leading edge of science-dependent advanced services in order to be able trade with China for physical goods. And because China is already approaching the limit of producing as many consumer goods as the rest of the world can afford, then competition between advanced countries is going to be more intensive than it has ever been for 200 years past

The leaders and the led — or the effects of Donald Trump and Marine le Pen

What we call democracy is not what the Greek word literally means — ‘power of the people’. It is a system of voting that allows the general public to blow off steam periodically at the ballot box, instead of having to demonstrate in the streets with the possibility of physically ousting the government.

Although big business in advanced countries likes to demarcate the buying public into many different classes for marketing purposes — indeed, these days, even to individuals — as far as essentials go there are only two classes — the leaders and the led.  Just as there always have been.

In the years before the industrial revolution, on the one hand we had the land-owning aristocracy who had all the political power as well as most of the wealth of the country and, on the other, most of the rest of the population, whether they were tenant farmers, farm labourers or a variety of small-time skilled business whose prospects of  wealth and power were limited.

True, there was an intermediate class of agents and facilitators.  A relatively small group of either radical individuals moving out of the old-fashioned ways of the aristocracy and, rising from below, a few exceptionally skilled individuals comprised a flexible marginal group of social mobility between the two that was able to adjust to circumstances.

Both the aristocrats and the rest were swept away by a massive expansion of the marginal class which responded to the commercial opportunities of automated cotton spinning and, two or three decades later, practical applications of various sciences that had previously been quietly developing for a couple of hundred years or more. This new social phenomenon then peeled away into its own two natural parts in the course of the 20th century — the leaders and the led.  A brand new middle class and a brand new working class had emerged.

Today, in the 21st century it is already apparent that the most advanced countries –particularly those with sizeable populations — are already dividing into well-educated elites and the mis-educated masses whose jobs are being dumbed down by increasing automation. As for the previous brudge of agents and facilitators between the two there is very little left. In England and America, social mobility is lower now than it has ever been since the state takeover of education.  Each of the parts is now largely self breeding..

When advanced governments get over their present fits of encouraging mass immigration to compensate for the ever-declining birth rates of the masses — which they are presently beginning to do in Europe and in America (with the threat of Donald Trump and Marine le Pen as leaders) — then the future decades of advanced countries will depend very much on whether the balance of trade earnings of their elites will pay for the increasing welfare of the masses whose balance of trade earnings with China and Vietnam and others are now increasingly in deficit .

If the elites can continue to afford to pay for the welfare state out of taxation it then the future 200 years — as the masses voluntarily go extinct — may not be so bad. However, changes from one jobs era to another are usually traumatic. Just as advanced countries adjusted only very stressfully from agriculture to factory manufacturing, the further transition of advanced countries to highly sophisticated service cultures is unlikely to be entirely peaceful.

Giving aid that’s really wanted

To compensate for my gloomy comments about international aid in my posting two days ago (“When aid is effective and when it’s not”) mention must now be made of the initiative for Iraqi schoolchildren shown on the BBC News Channel tonight. A joint product of Arsenal Club and Save the Children Fund, a first class football pitch and stand have been built at one refugee camp and squads of enthusiastic boys and girls are now being trained.

Given the astronomical fess earned by English Premier League soccer players, the one day’s pay that the Arsenal players have donated goes a very long way in Iraq. This is such an imaginative piece of charity that I feel sure that other clubs in the League will follow.

This seems to satisfy what Angus Deaton’s lifetime studies have shown him about effective aid — that the recipients are the best people to define what their best needs are. Hopefully, the donors in this case will not only keep in touch with the soccer progress of these young players but also ask them — for next year’s topic perhaps? — what other help would they like next.

And, by the way, the transactional nature of this gift — as important for altruism as for trade — was glimpsed in the video clip by the piece of (modestly sized) Arsenal heraldry on the front of the stadium. Arsenal already has a good reputation for soccer brilliance, of course. This additional Iraqi venture won’t detract from that at all.

When the world changed its mind

Today is the 100th anniversary of the Easter Rising in Dublin when world opinion decided that the Irish should become independent from England. It was a period of great troubles in Ireland but also great troubles in the Cabinet in London. Unbelievably, all through the First World War, 1914 to 1918, the British Cabinet spent far more time in discussing Ireland than what was going on the wartime trenches.

James Connelly of the Irish Citizen Army, joining with the Irish Volunteers, seized several public buildings in Dublin and proclaimed an Irish Republic. Within days far larger contingents of the British Army devastated parts of Dublin and suppressed the Risings as bloodily as it was possible to be. About 500 people were killed, 5,000 people were taken prisoner, and 1,800 of them sent to internment camps in England.

Most of the leaders were court martialled, inevitably found guilty and were executed by firing squad. James Connelly, who had been injured in the fighting, was unable to stand so he was tied down at his wrists, and shot in a chair. This elicited a great wave of sympathy and support for Irish independence all round the world, particularly in America.

At the time, the British and its Allies, in fighting Germany, depended for a gea deal of its food, resources and armaments on America. So the great anti-British wave from Irish-Americas — including some of their leading families such as the Kennedys — concentrated the minds enormously of those in the British Cabinet! It wasn’t long before Ireland — or most of it — gained independence from Britain.

The Irish are celebrating the Easter Rising today — something that most British people know little or nothing about but will be remembered for hundreds of years yet by the Irish.

Why Britain will vote to remain in the EU

By far the most popular response made by people being questioned in the street by journalists over which way they’ll vote in the 23 June referendum is: “We want to see more detailed figures of what it will cost the country whether we leave the EU or remain in it.”

Which is all very strange because on normal voting occasions, electors will almost totally vote strictly as to whether one party or the other has made specific promises, not for the health of the country as a whole, but in their own personal , or class’s, interests.

The arguments for and against remaining in the EU make no specific promises to individual or class interests, but to wider issues such as national sovereignty or future economic viability (or in other words, will our general standard of living go up or down?).

The reality is that the coming referendum is not about people’s interests but those of the top politicians. And by this is meant the senior civil servants — who largely succeed in being unobtrusive — as well as the elected populist MPs.

So what we actually have are senior civil servants and top politicians — of both the left and the right — voting to stay in the EU because they want to retain the predominant power of the non-elected Brussels bureaucracy.

The reason why the primacy of the Brussels bureaucracy is attractive to top British civil servants is obvious — it’s more of the same. But it’s also attractive to top politicians because its highly regulatory nature — and regulations are more easily dealt with by big business rather than by smaller businesses who constantly threaten them from below.

And, of course, it is big business which is more able to give well-paid directorships and consultancies to retired civil servants and politicians for help given to them in the past.

So what we have in Britain is a Labour Party which is largely partial to the EU because of its highly regulatory nature and a Conservative Party which is largely partial because it always goes along with the interests of big business. Thus, what we’ll have come 25 June is something near 50% of the population voting along their normal party lines to remain and 50% of presently undecideds who will split between yes and no.

We’ll only be leaving the EU when the whole construction collapses.

The effects of five important plants in history

Quite the most fascinating obituary I have read appears in my paper today. The deceased is Henry Hobhouse, aged 92, whose interesting life started with running away from Eton as a schoolboy and joining the merchant navy. The obituary spends most of its words in describing a book, Seeds of Change, he wrote when he was in his 60s.

The book discusses the five plants that Hobhouse considered to be the most important in history. By this he meant recent history. The most important plants by far in civilized history have been wheat and rice and other cereals derived from the cross breeding of wild grasses.

Nor does Hobhouse mention silk, initially the material grown by grubs in the mulberry tree and the sustainer of the oldest, longest and most valuable trade route for two millennia — the Great Silk Road.  Nor does he mention spices which, as anti=bacterial additives to meat,  have been traded between Asia and Europe for centuries.   His selection is of fairly recent times, each with significant consequences.

Quinine
Made from the ground bark of he cinchona tree growing in the high Andes it was used by the indigenous Peruvians as a muscle relaxant. In addition, when the Spanish Conquistadores had brought it to Europe, it was discovered to treat malaria and millions of lives in Africa and Asia have been saved. Further, it was the first natural chemical to be made artificially and thus opened up a massive pharmaceutical industry.

Sugar
A natural, but infrequent natural product to which we have become addicted because our genes have not built up a defence to imbibing too much of it. It was a product of millions of Africans captured by Muslim traders and sold to British and French sea merchants for work as slaves in sugar cane plantations. Lovely to taste it has become in recent years one of the greatest scourges to good health in advanced countries.

Cotton
Also brought about as a world-wide industry originally by massive use of slave labour in the southern States of America. When woven it is not as strong or smooth as silk but much superior for weaving and printing than linen. Initially confined to home spinning and weaving, mainly in India and Egypt, cotton spinning became the first largely automated process.

The immense profits from the first few decades of factory production spawned the immense profits that would later be made to invest in deep coal mining, iron and steel, railways, steel ship building, chemical, electrical, radio and, last of all electronics. None of those would have ever started without the huge boost from cotton spinning.

Potato
Another natural product, but highly cross-bred into many different types by south Americans, was also brought to Europe by the Spanish. It was a particularly important part of the Irish diet and, when potato blight struck in 1845, caused a million deaths from starvation and a migration of 3 to 4 million to America. This was a significant enough hard-working population to help the vast growth in the American economy and to stimulate even larger immigration numbers from Europe.

Opium
This occupies a very shameful place in British history when, in order to force China to sell more tea to Britain in the 19th century we ensured that millions of Chinese became addicted to opium, which we grew in India. Understandably, this soured the relationship of the Chinese government to Britain after the take-over by the communists in 1949 and explains why we still export fewer goods to China than France or Germany.

Henry Hobhouse’s Seeds of Change was certainly worth the writing and is a useful re-balancing of the usual history books which confine themselves largely to political and military events. There are always powerful undertow going on and this one helps to put the industrial revolution in better perspective.
Important plants,

Being content with the fruits of the industrial revolution

Two items in my newspaper this morning are yet more evidence to my mind that the industrial revolution, 1785 to 1985 might have been a flash-in the pan. It is highly likely that we are now back to a hardly discernible rate of economic growth — let us say, well below 0.5% per annum — that was characteristic before then.

“What nonsense!” those who support continuing high economic growth will say. “Innovation is more prolific today than it’s ever been throughout history. There has never been so much scientific discovery.”  True enough, but the latter doesn’t necessarily lead to the former — at least not in the consumer goods department. There hasn’t been a single new consumer item in 50 years or more. Improvements to existing ones, By all means. New ones, No.

And, let’s face it, it is new consumer goods that has accounted for something like 70% to 80% of all production ever since 1785. Without uniquely new consumer goods in the advanced countries they can’t possibly lead all the rest of the world into economic growth because they carry out almost all the scientific research.  The rest of the world is crowded out.

Instead of economic growth, what is happening in the advanced countries as we proceed from manufacturing occupations towards service professions. Instead of institution-led high-intensity financial investment in projects with high and relatively rapid returns, we are now proceeding to a condition of lower, parent-led financial investments over longer periods into the education of children with much longer hopes of returns.

What were the items in my paper this morning?   One was a short item describing how Japan is “facing a new recession.” That will mean that Japan has had a flat economy for 35 years ago. The other is a grumble by Andrew Sentance, formerly a member of the Bank of England (BoE)’s that we are now becoming “addicted to low interest rates”. (We need to correct him here, banks are still charging respectable interest rates when making loans. It’s the BoE’s basic rate of 0.25% that he’s talking about.)

But why not remain addicted to zero basic rates in the central banks?   Why not dispense with central banks altogether as being no longer required?  Most workers in an advanced economy today earning a decent wage are quite content with the consumer goods that are now available and the leisure pursuits that were also developed during the industrial revolution.

Big Businesses says Yes to EU, Big Businessmen say No

In a recent Letter to the Daily Telegraph 36 CEOs of the largest 100 businesses in Britain proclaimed their support for remaining in the EU. The remainder — who were sure to be asked — were either against membership or were indifferent. Interestingly the CEOs who would privately say they are against the EU haven’t signed another Letter because that would be against the interests of their company. The larger the company the more it tolerates EU regulations because it helps to keep smaller competitive businesses — which can’t afford the administrative staff — at bay.

However, ask the retired CEOs of major British companies and it’s a different story. The Vote Leave group has now published a Latter signed by 250 of them.

It’s not going well for the EU civil servants in Brussels and the tame politicians they manipulate, with two major problems — monetary and immigration — nowhere near solved. The one prevents at least five countries from ever reducing their national debts. The other has already broken the EU’s proudest achievement — the internal borderless zone. It may already be acquiring its third major problem — terrorism by Muslim State fanatics — against which cooperation between different police forces has been largely lacking,

When aid is effective and when it’s not

Now that we are seeing on our television screens suffering and distress in Europe on a scale as never experienced before since World War 2, how much aid we give, and what sort, is becoming a lively topic. However, as Angus Deaton, last year’s Nobel laureate in economics, has showed in his lifetime’s work, a donor had better not make assumptions about the needs of the potential recipient — unless he knows the recipients very well indeed — because he will almost certainly get them wrong.

Private aid from rich cultures to poor ones, particularly via multi-layered organisations like Oxfam, is as likely to be as miscast and thus, subsequently misspent, as government aid.

Even when the need seem to be obvious — such as the Ebola epidemic in East Africa last year — our medical and technological aid, even the two vaccines that were hastily developed, did very little. Our government’s aid — the building of a hospital by soldiers (after several weeks of unnecessary training in medical matters before they went there) — was so slow that the density of outbreaks around them grew much worse.

It was only when the people had absorbed the nature of the diseese that they applied the only effective solution — widespread self-quarantining — the same that had been adopted by hundreds of villages in England during the Black Plague.

Aid is seldom as good as trade unless it’s local and transactional, that is when debts are implicitly understood rather than explicit. Altruism is only at its best at home when debt, recorded in collective memory, is usually repaid sooner or later, if not by the original recipient then by another memory shareholder.

When aid is not transactional then there’s an ulterior motive such as enhanced national or personal status — or sometimes both at the same time when government politicians make ‘generous’ decisions to foreign countries.

Grabbing the dragon’s tail

At last, someone is talking sensibly about Artificial Intelligence (AI). Despite claims for the past 50 years that AI is just around the corner, nothing resembling it has yet appeared. Computers and software, however powerful they have become, can still only carry out operations that have been well defined beforehand.

Even the ‘trial and error’ type of software that was devised for the AlphaGo computer that recently defeated top human Go players was far from having any sort of self-learning ability in entirely novel situations. The software was only sampling potentially successful routines that had already been gained from millions of games

Proponents of AI make a great to-do about imitating the neurons of the human brain — that the more they are used, the stronger the connections between them become, the easier that digital messages can flow along them, and the more waxing and waning of different competing neuronal networks. This is supposed to be ‘self-learning’.

So it is but imitating the thinning and thickening of neurons is only part of it. What about the transmitter molecules in the human brain that carry the messages across the synapses — the gaps — between the neurons? There’s nothing remotely like this in any AI software.

If AI program writers were to try and extend the digital world of neurons into the analogue world of transmitter molecules they would then have to try and simulate hormones. And these, in turn, depend on genetic instructions which are themselves only partially programmed but can also adapt to new situations.

Here then is the basic difference between the human brain and DeepBlue computer than can defeat master chess players or the AlphaGo likewise for Go players. A human player reacts to the last move of his opponent and, on occasion, come up with a novel response.

A computer can only react, not to the last move itself, but to the latest total board situation as whole. It can only make a reply when it has matched the situation with another in the computer’s memory resulting from millions of past games. No novel response is possible — no matter how much self-learning is supposed to be taking place.

It takes a brave person to challenge the fashionable view of AI view in the presence of aficionados, not to say strong proponents, but such is Danko Nikolic at a recent conference in Berlin. A neuroscientist at the Max Planck Institute for Brain Research in Frankfurt he said that AI software and computers can approach the abilities of the human brain as close as you like but still not be able to take that final jump into becoming something that is its equivalent in learning ability.

Learning, Nikolic says, is not just about the neurons of the brain. There are deeper genetic elements, too. The only way that a truly intelligent computer may be devised is by repeating human evolution.

In the brief report I have before me in this week’s New Scientist it doesn’t say why human evolution has to be repeated but Nikolic will know, of course, that some of our genes involved in brain development in the embryo go back to the very beginning of all life forms billion years ago and that it is genes and hormones that actually do the new learning long before neurons are involved — the latter are just the final ‘hardware’, as it were.

As far as computers are concerned, the human variety is what Nikolic calls a ‘singularity’ — like a black hole in astronomy it cannot be entered. So it seems to be, in my opinion.

When writing the really relevant books

The big disadvantage of using a human to make things is that you not only have to pay him sufficient food energy for the 8 hours a day he works for you but also for the energy he spends for the other 16 hours a day. In the case of a robot you only need to feed it with the same amount of energy it actually uses when working for you.

If the product that both of the above make is the same, and if the materials they use are the same then the profit that is made per item when you use a robot is the cost of the energy difference. This is the fundamental basis of all economics — yet you would never know it when reading a text book on the subject.

What the text books are much more concerned about — obsessively so since the extraordinary experience of the industrial revolution when mass consumer markets came into existence — is the number of products that can be made. The more of any particular item that you can make, according to the rubric of economics, the lower the unit costs and thus the higher the profits that can be made.

Yet this might only be a passing phase. There could come a time when every person has his own robot that would make him whatever item he desired. The profit that could then be made is if your robot is more efficient and thus uses less energy — at less cost — than someone else’s robot.

This will never happen for one simple reason.  Mind you, in due course, it could easily be the case that such robots could be made — let’s face it, we are relentlessly pushing our way in that direction.  The reason why it will never happen is nothing to do with the robot.  It is that each of us, when working in isolation, become mentally deranged within days. We all have a strong genetic need to be working in groups with others. We’re not bacteria, we are human beings, an intensely social animal.

But there is no reason why, in the future, we should not be living and working in groups of maximum satisfaction and stability — which many scientists of human nature now put at about 150 of all ages (increasingly known as the Dunbar number) — but able to trade with other groups anywhere in the world.

Each group wouldn’t be trading products — and thus having to transport them — we’d be trading software over the internet. Each group would be able to make all the products it needs in situ, but if it also wanted the very latest version of any particular product then it would trade for the latest software from another group.

There is just one fly in the ointment. In order to prevent in-breeding and the acquisition of genetic handicaps within the group the girls, when of a certain age, would want to survey many young men beyond their own brothers and cousins. They would want to congregate. And young men, as anxious to have sex as the young women are to have children, would also want to congregate. Also those of both sexes with unrequited intellectual interests would also want to congregate with many more others.

In the past many hunter-gatherer groups and pastoral families solved the congregation problem by meeting once or twice a year in grand jamborees. Today, we have had cities. In fact, we’ve always had cities ever since civilisation began. Cities, particularly university cities, have always be attractive for partnering purposes and, for some, mentors for their skills and experience.

And, in those future years, some of the economist academics — or hopefully long before then — will be writing the really relevant books which concentrate on the energetics of economics and not be so obsessed with mass numbers of consumers and production runs.

No more catalysts wanted for the time being

I see that Apple are bringing out a cheaper smartphone — and no doubt the other manufacturers will, too — and it will undoubtedly harvest an even larger swathe of users around the world. It has a smaller screen but otherwise it not only keeps the current technology but also adds a few of the latest apps.

The price has roughly halved. If we compare the real price of television sets when they were first sold with that of today — probably as low as they’ll ever be — then the smartphone will probably go through at least one or two more price-halving reductions.

In the next few decades when all the rural poor of the world will have migrated into cities or, possibly, made new cities out of the larger refugee camps, then all the world’s poor will be able to afford a smartphone, just as the poor of advanced countries can already afford television.

The likelihood is that smartphones in future years — with even higher definition screens — will fully take the place of television for the poorest of the world. Governments, using the same strategy of ‘bread and circuses’ of ancient Rome, will ensure that all their poor will have a sufficient variety programmes on their monitors to keep them reasonably happy and below any revolutionary boiling point.

Except for those between puberty and young adulthood. Their surging hormones, crying out for sexual release and for acceptance in the world of work will likely not be largely pacified with smartphones, however versatile their offerings. Indeed, we are already seeing the effects of television in priming, and of smartphones in subsequently guiding, the vast majority of those who are seeking to enter Europe today. They’re not so easy to control.

Television and smartphones can by no means considered as the main causes of mass EU migration — or the brutality that the EU is probably going to use — but they’ve been catalysts at least. Perhaps it’s a good thing that there are no more consumer goods that are being developed by the major multinationals. The effects of smartphones alone will be enough for the time being until world over-population is well on its way down.

The deadly twins

Of course, ‘sugar is evil’ and, by now, a great deal of scientific research has proved it to be so when imbibed in too large quantities. But sugar, whether sucrose, fructose or glucose is not unique. Ethyl alcohol is another.

Both are small, easily absorbed molecules, and have highly pleasant effects in insect and animal brains. Both are produced in nature but only in very small, occasional quantities, enough to attract either insects or fruit-eating animals which then voluntarily serve as either necessary agents (e.g. bees) between male and female plants or as distributors (any mammals) of fertilized seeds.

When sugar and ethyl alcohol can be made artificially in immense quantities, far beyond anything we can cope with safely per capita then governments will always have problems in trying to restrict both of them — so much so, in my opinion, that they will never succeed, whatever strategies they try.

The only answer to excessive consumption of either is education — that is, of people intelligent enough to take notice of scientific research on the one hand, and subsequently socialize in ways that don’t also involve excessive imbibing on the other. In other words, obesity and alcoholism — and all their serious attendant illnesses — will always be, on average, a graded social phenomenon.

Non-currency money

A reader has written to me today asking me to explain what I meant by personal cheques being “non-currency money” in my gold standard posting of yesterday. When bank-printed personal chequebooks first began to be used in the 1870s each cheque could, instead of being paid into someone’s bank account, be used again. All that a recipient had to do was to countersign the cheque on the back and use it again when paying someone else. Thus, although the cheque wasn’t currency it was, if counter-signed, acting as additional money in the system.

From the amount of space available on the back of a cheque it could be used at least twenty times. Thus a personal cheque for £10 could be successively used. taking the place of £200 of banknotes that would otherwise have been needed.  However, a little reflection will inform you that the personal cheque system could have been used for a ‘black economy’.  In due course, large numbers of transactions could be carried out between thousands of people without the knowledge of the bank or — much more importantly — the government’s tax system. This is why, about 50 years ago, countersigning was stopped and personal cheques became one-stop conveniences.

Thus, from the 1870s, although a gold standard was supposed to be in existence, personal cheques meant that considerable inflation was actually going on. It didn’t so much reveal itself as higher prices of goods in the shops — as it would today — but as much higher wages in the factories and fully absorbed in spending.  For the first time in a hundred years, workers were able to start spending  on the increasing variety of consumer goods appearing the shops as well as being able to enjoy themselves on holidays or paying to to watch soccer matches

During the First Great Depression (1873 to 1896), when much new industrial investment was failing due to lack of sound money, there was hardly any subsequent unemployment and the working classes in the textile, coalmining, shipbuilding and railway industries hardly noticed

If, however, someone with banknotes wanted to cash them at the bank for gold coins, the banks could usually do so quite comfortably because a good bank during that period would have least 20% of gold reserves. In Germany and America at that time — our main competitors — there were many times more banknotes than coins, far more than there were gold reserves in their banks. The so-called ‘gold standard’ was never strictly so, only partially effective.

Thus although we’ve had a currency standard ever since 1717 when Sir Isaac Newton fixed it, and a gold standard legally defined in the 1844 Banking Act, it has never come about that every single English banknote was fully covered by 1/3.83rd of an ounce of gold either in a high street bank or at the Bank of England. The Gold Standard was never fully brought into existence, only an approximation to it.

If the Chinese ever bring about a free digital yuan for use as a world trading currency, then they will certainly make sure that every single one will be covered permanently by a definite fraction of a gold yuan coin or of an ingot in the vault of its central bank. This is what the Americans were not able to do in 1972, thus allowing the dollar to inflate out of all sense and causing massive lop-sidedness between surplus countries and deficit countries. This is now producing an impasse which seems insoluble.

Looking forward to Boys’ Liberation

It is already apparent that among young think tankers appearing on television that women are far more articulate than men. This is not in the social subjects in which we’ve long accepted them to be better but also in economics. If any young minds are going to lead the way out of the present fog then there is a very fair chance that they will be women.

It’s a tad premature yet but one of the most serious reforms that that will loom mightily in the years to come is Men’s Lib with particular reference to education. At puberty girls’ minds are already years ahead of boys’. This was fine and dandy when young women generally chose older, more economically dependable men as providers for themselves and children — and still do — but not any more in an age when intelligence and educability counts more than ever.

Men are going to be totally swamped by women in most occupations in the years to come until the age of about 30 and onwards. At that age woman have been fully mature for, on average, four years sooner. Men won’t begin to catch up with women in pay and seniority in most disciplines until they’re about 35. The reason is, as neuroscientists are now telling us, is that whereas the frontal lobes of women’s brains are fully developed at age of about 25, men’s won’t do so until nearer 30.

In the years to come we’ll have Boys’ Lib — particularly for more appropriate exams from childhood onwards — because they cannot cope with all those — even through to graduate level — that are presently thrust upon them.

The big fallacy of The Gold Standard

[ KH: The following is a long posting. It is the first history of the gold price that I’m aware of — and I have read well over 100 books on and about gold in the last 20 years. Because I have written this extempore in one session, as I do all my postings, one or two details may be wrong but for anybody who wants a simplified, albeit accurate, bird’s-eye-view of the history of gold as currency, please read on.]

The big fallacy of the gold standard for national currencies is due to the fact that there has never has been one yet — except for a few weeks or months 400 years ago. So when proponents of The Gold Standard talk glowingly of it, or antagonists scorn it, then neither is speaking of what it really is — or could be — as the stable foundation of stable national currencies.

And here what must be interpolated is that the ‘gold’ part of the gold standard need not be exclusively that of the yellow metal. Several other items would also serve as a gold standard. It could be silver, or platinum, a bag of mixed wheat, rice, millet and oats, a certain number of kilowatt-hours, nitrogen, oxygen, average solar radiation received per square metre of the earth’s surface, etc. In short, anything that is both valuable, measurable and stable in quantity from week to week and year to year would do as well — in theory.

In practice, although it has turned out that the best material was gold during the 18th and 19th centuries — and when the term ‘gold standard’ came into ordinary parlance — it was far from being stable in quantity during that period. The amount of gold that was mined leap-frogged during the 1850s (California), then again in the 1870s (South Africa) and again in the 1890s (Australia).

Many more deposits have been found around the world since then but no single source of anywhere near the same size as any of the above three. Because all of the earth’s surface is now being constantly examined by geologists for all sorts of reasons,we can take it that quantity of gold that is now being mined and refined year is modest in comparison from year to year.

The reason why an apparent strict gold standard only applied for a short while is that, after Sir Isaac Newton had fixed the value of one ounce of pure gold in terms of English gold sovereigns — or ‘specie’ — considerable English trade was going on with Europe and the real value of both the sovereign coin and gold (in England) was changing very slightly — but hardly measurably because trade was largely balanced from year to year.

The price Newton settled on in 1717 was 3 sovereigns (gold ‘specie’) 7 shillings (silver coins) and 10 pence (copper coins), or, in present day terms, £3.39. In America, it was $18.93. (Strictly speaking there were no gold dollars in America in 1717 and the $18.93 price applies to the 1800s and onwards. However, during all that time the price of gold in England was still £3.39.

At the time that Newton established the price of gold as £3.39 this only applied to England. Some of the gold had come to England via pirating or as profits from trade, but this was still only a relatively small proportion of the total. Most of the English gold had been mined — or panned — in England, Wales or Scotland. But this local production of gold applied in many other parts of the world also and, as in England, mainly used for personal jewellery or lavish ornamentation in churches or palaces or in rich men’s houses.

Each gold mine would have had an invisble radius of people around it who bought it for their own use. Thus there were many different prices of gold all over the world with hardly any trading of it between them. However, because gold was also useful to merchants as balances when bartered goods didn’t quite match, then hundreds of different gold coins, each with its own standard weight, began to be minted. Gradually some sort of commonly accepted coin exchanges began to be set up, especially in the great Champagne and other Fairs that stretched throughout Europe in the late Middle Ages. But the approximately common price of gold was still not applicable in the whole world over.

A common price only emerged when the industrial revolution burst forth in England from about 1780. The countries which wanted to send gold to us in exchange for our goods had to accept the English price of gold whatever their own local valuations. Some local gold would have been much less valuable than English gold so people in gthose countries would have had to work harder to pay for their imports. Some local gold would have been more valuabe than English gold so they would have had a double bonus when trading with us. They not only received the goods they wsnted at comfortable cost but also their surplus of locally produced gold became inflated and thus expanded their internal money circulation.

Becausd we were the principal aupplier of cotton thread and then a host of other highly desured manufactures during the 19th century then countries all over the world — about 40 of them — gradually adopted our valuation of gold as expressed in their own national coins. By and by, however, by about the later 1800s, the valuation of gold was so common that tbeir own currencies began to have a fixed valuation and slowly began to be accepted for trade instead of gold ingots or bullion.

But this would only happen between counries whose merchants fully trusted the national currencies of other countries. The English, for example, would accept the gold currencies of neighbouring countries we traded the most with. The Bank of England (BoE) would sometimes keep French gold francs and gold German marks in its vaults as well as gold pounds but few others.

However, by about 1900 althoough there was a common valuation of gold throughout the world — mainly the 40 largest trading countries — there was nothing like a world gold price. But the huge quantities of gold mined on California, South Africa and Australia didn’t have the slightest effect on world-wide trade resulting from the industrial revolution.

As gold miners are not noted for wearing personal jewellery, most of the above gold soon passed through their banks and thence into trade with goods from England But the Bank of England still quoted the value of gold as £3.93 per ounce even though its real price was was much higher compared with goods. The same applied to all the other gold currencies around the world. They were all carrying an invisible premium of much higher value in which their currencies were expressed.

This new valuation of gold had to remain invisible until the additional tranches of Californian, South African and Australian gold had finally worked their way into all world-wide trade. By about 1920, increasing pressure was applied to the Bank of England to go back onto the gold standard which had been temporarily set aside at the beginning of World War I in 1914.

Thus by the 1920s to 1930s there was a need for a world Gold Exchange so that even small differences between different national valuations of gold could be remedied. Also by that time, and mainly because of its economic growth during World War 1 — in supplying armaments to Europe — America had become the dominant trading nation in the world.

It was the world-wide price of gold in dollars that was more appropriate from the 1920s onwards. Because England had gone back onto the gold standard in 1925 and off it again in 1931, it was the dollar price of gold that carries the narrative forward from now onwards. In 1933, aware that the supposed price of $18.93 was too low, President Roosevelt wanted to raise the value of the reserves of gold in the vaults of its central bank, the Fed. This now had about 80% of all non-privately owned gold in the world.

Roosevelt raised the price of gold by making the private ownership of gold illegal in America. On pain of imprisonment owners had to sell their gold to the banks which then sold it on to the Fed. When all or most of millions of people’s gold coins had been gathered in, he then raised the price arbitrarily to $34! This appropriation — illegal under any notion of common law — is something that an American president would never get away with these days. The millions who owned gold dollar in the 1930s were not as well informed as those of today.

But the new price of $34 was still not the free market world price of gold even though, in London, there was now a London Gold Exchange which established a supposed fair price every day. But it could never be a true price because the largest central banks, and the American Fed most of all, had far more gold than any private buyers and sellers in the world, and so some of the largest governments could control the price. Which they did from then onwards because they wanted to make sure that the printed currencies they were now issuing would be the only currencies they would accept for taxation or pay out for services.

In the late 1960s, the larger countries of the world — those we know today as the G7 — allowed the price to creep up to $41 an ounce but otherwise no further. Already by then some of the more successful European countries such as Germany, France and England, realising that gold still had enormous reputational value, and wanting more of it for their central banks, began knocking on the Fed’s door asking to change some of their marks, francs and pounds for gold at $41 an ounce. America had to start to sell. By 1972, the Fed’s stock of gold had been reduced from 24,000 tonnes to 11,000 tonnes and president Nixon, decided that America would soon be cleaned out of gold

In 1972 Nixon took the American dollar off the gold standard and thus protected his stock og gold from further buying pressure. The next year the price of gold rose from $41 to $97 an ounce, and by 1974 it was $154. It rose to almost $2,000 an ounce in 2011 but has since declined to $1250 where it appears to be steady for the time being. Many experts think the $750 dip has been was caused by American manipulation because of the desperate need of the Fed to maintain the dollar as the world trading currency. There is evidence for and against manipulation and the jury is still out on this.

However, there is also evidence that China has been buying large quantities of gold ever since 2000 when the euro started life. Suffice n it to say that huge quantities of gold have been drifting from the West to Asia in the last 15 years. However, although China have said for many years that its official stock of gold is only about 1,000 tonnes of gold nobody believes this. China is also the largest producer of newly mined gold. Because it is also the largest refiner of scrap jewellery gold in the world and the Shanghai Gold Exchange is now larger than London’s then some think that China actually has 10,000 tonnes of official gold in its central bank, the People’s Bank of China (PBOC).  This compares with the 8,000 tonnes in the US Fed.

China has said officially that it wants to make its own currency, the yuan — or renminbi — into the main competitor to the dollar as the world’s main trading currency. At present about 20% of world goods are transacted in yuan. Although America will do as much as it can to prevent a yuan takeover, or even an equal share of world trade, it is difficult to know how it could succeed if the yuan is gold-backed — and therefore guaranteed against devaluation by inflation.

Meanwhile we still haven’t a free market gold price. We still haven’t arrived at a true gold standard. It’s a fallacy to say that what went on in late 19th century England was a true gold standard because millions of personal cheques — a recent innovation — were also in circulation This was, in effect, a huge addition of non-currency money — and certainly not covered by the gold reserves of the high street banks and the BoE.

Thus we have never actually had a true gold standard yet even though we say we had. This is something that economists, particularly young ones with no firm view about the gold standard, whether possible or not, whether likely to come or not, should bear in mind when several eminent ex- and current central bankers — as experienced and knowledgeable as anybody — say that a monetary catastrophe as least as bad as 2008 is coming.

Looking for Utopia

In today’s Guardian newspaper, the following question is put: “Where now are the earthly paradises from which an idealist can take hope?”

What geneticists are proving — as much as any scientific statement is ever proved — is that man is much too much a mixture of instincts that have been acquired for survival purposes in a variety of evolutionary backgrounds. And, as some of our genes are identical with those of the earliest bacterium and go back 3.5 billion years, many different environments have left their traces in our DNA.

These environments have been so different that for many instincts there are often almost polar opposites — such as selfishness or altruism, fight or flight, hierarchical exploitation or socialisation, fear or euphoria, individualism or mass credulity, deviousness or fairness, deference to leadership or opposition, etc. Sometimes, both of a ‘pair’ can be elicited simultaneously within a population when a new situation has echoes of different periods of the past.

Modern institutions and economic systems are as much the result of plunder as they are of voluntary trade. We are not a largely market society as most economists imagine. To answer the question: Nowhere.

This isn’t to say that we are without hope. For one thing, economists could look internally at what biologists are saying about our instincts. For another, economists could look externally at what physicists are saying about the energy characteristics of our economic systems — that the world economy has self-determination beyond anything that governments may wish for.

The only question to ask about gold

Gold will always be a valuable metal because for one thing it is rare and for another its properties are such that it makes it a perfect material for personal ornamentation.

Personal ornamentation, along with hairdressing and quality and style of clothes, is the method by which we initially judge the social status of a new acquaintance. Social status, apart from eating, sexual activity and our propensity to work and relax in groups, is the most characteristic aspiration humans have.

Aspiration for social status varies in one dimension by means of being strongest in childhood, adolescence and young adulthood and mostly wearing off by the age of about 30 years for most people when the brain is largely fully developed. Aspiration for social status varies in another dimension from the masses through to higher strength and discernment among the higher social classes.

Aspiration for high social status affects all infrequent ambitious individuals whether in artistic, scientific, intellectual, political or business circles. Some want wide public acclaim of their status, others want only for personal reputation among their own kind, however small.

The need for gold, either worn personally for status or as the necessity for currency somewhere among the practice of one’s occupation will thus be maintained as long as man will remain.

The question then is: When the next monetary crash occurs will gold be re-established as the basis for a non-inflatable currency either by:

(a) a rapid coming together of all nations and agreement of a new monetary system  within days;

(b) a rapid gold-backed Chinese yuan as a replacement for a worthless American dollar;

(c) a rapid coming together of multinational corporations to use a gold-backed digital currency in order to keep the world’s trading economy going.

I back the third scenario but you may have your own views — unless you believe that all governments have the world’s economy well in hand and that a worse catastrophe than the 2008 Crash won’t happen.

And what about China, India — and even America?

The previous posting about the EU prompts me to ask whether China, India and even America will hold together in the longer term.

China has at least 30 spoken languages and is only held together by the forcible learning of written Mandarin words at school. India also has many regional languages. It is held together by the use of English — a product of colonialism — at all senior levels of politics and business. America is acquiring millions of immigrants whose main language is Spanish.

All these, although unified for a lot longer than the EU seem to me to be likely split in the course as modern nations and regions becomes increasingly specialised and competitive.

Where’s the European culture?

The EU is bound to fail sooner or later because it lacks the unifying culture that is necessary. And that involves one language. Even at its very beginning it would never have got beyond the original six countries if all their leading politicians didn’t have English as a secondary language so they could it around one table and conveniently talk together..

For all the quasi-democratic words that are batted about in second-hand English by politicians of the 28 countries and which are supposed to bind them together, they all have different cultural meanings. But outside the conference rooms or the corridors of the Brussels’s civil servants the French remain strongly French, the German German, the Greek Greek and so on. A European cultural tradition can never emerge and that is the death knell of the EU.

What two people–now much wiser–say about the 2008 Crash

Three sorts of people who were obtaining house mortgages in America prior to the 2008 Crash should never have have been granted them. They were:

(a) borrowers with ‘no-doc’ loans — they supplied no documentary information as to their income;
(b) borrowers with ‘liar loans’ — they, or their firms, or their accountants, gave inflated income figures;
(c) borrowers who were ‘NINJA — people with no income, no job and no assets as collateral.

I’ve recently been reading two books about the years immediately before the 2008 Crash by two former chief central bankers — Alan Greenspan of the US Fed and Mervyn King of the Bank of England — who ought to have been as responsible as anybody for it. Courageously, neither of them try to absolve themselves from their own personal measure of blame in not seeing the warning signs beforehand.

Both of them, however, say that the sub-prime housing crisis was the least of it and only a trigger for all the other spectacular collapses of banks and financial firms during 2008 and 2009. There was a great deal else that was seriously wrong in the financial world than sub-prime mortgages.

Furthermore, both Greenspan and King say that all the government regulations since then don’t touch on the “great deal else” that is wrong with the monetary system. Both of them say that a worse catastrophe is inevitable.

Revolutions to come in the advanced countries

In man’s early days, one tribe would only fight against one other neighbouring tribe at any one time. The same applied when tribes became empires and. later, when empires became nations. One against one.

All that started to change about 250 years with the development of large, highly mobile — and extremely expensive — artillery regiments when independent nations began to associate in brief alliances in order to fight wars. Since then, any individual country — particularly if European — might have been through a succession of alliances. In effect, though, it is still one against one.

In the last 50 years or so, with the advent of multinational corporations, and the internet, and increasing individualization of both customers and countries, we now have a new situation where a country, with its own unique blend of skills, is in competition with every other. It does so by means of a positive balance of imports and exports and also, by means of taxation, how much it can attract good businesses than can bring more profits and employment. It is now one against all.

By far the best strategy for any country is to identify intellectual brilliance proportionate to population — and to ensure adequate training — more than any other. Further, a country needs to make sure that as high a proportion as possible are welcomed into its various social elites which take all the economic and social decisions..

In order to do this, a country must endeavour to select as many children at the time of puberty when they show clear signs of high intelligence and, equally importantly, equable personality — products of both good genes and good parenting — and make sure that they are encouraged and not hindered from then onwards.

Such children a slightly likely to be found proportionately more often among the present elite in any country — but only slightly so. Elites are not yet as separated from the masses as they are already tending to be in some of the advanced countries. The fact is, because chromosomes are chopped up — and parents’ packages of genes redistributed — every fertilization, brilliant children are almost as likely to be found in the masses of a population than in the existing elite. So long as present gaps don’t widen too much further.

Appreciation of the talent that is currently being lost in the non-elite part of the population is now seeping into governments’ consciousness, particularly advanced governments where competition for survival is fiercer and ambitions of success are sharper than most. There are already signs that great changes in education, particularly education in childhood so far, are now taking place in advanced countries. We’re likely to see revolutionary changes in the next 50 years.

The EU-Turkey ‘Agreement’ is dead in the water

The EU-Turkey ‘Agreement’, negotiated yesterday, is dead in the water before it starts. Here are a couple of questions:

1. Is the EU capable of adequately assessing 200,000 refugees, now trapped in Greece and Italy?

[No, not without proper training of assessors and protection by sufficient army and security personnel.]

2. If and when the 200,000 are sent back to Turkey before equivalent numbers of Syrians are then transported to the EU, is there any estimate of how many will actually be sent?

[None at all. Except for trivial numbers none are likely to be transferred anyway because at least half a dozen EU countries — who’ve understandably kept quiet during the negotiations — will refuse to have any.]

Keeping the Muslim and the English poor content

To a secular person, the differences between Catholics and Protestants within Christianity are pathetic. They are almost totally in agreement in their central beliefs yet cultural differences keep them apart — almost as widely as 500 years ago when the initial division took place.

Nevertheless, except in areas that are economically stressed — such as happened in Northern Ireland or Glasgow — the differences are not so obvious in public consciousness today because both schisms are now losing supporters. Members of both are steadily because secular. Day-to-day cultures always finally supersede older cultures even though it may take generations to do so.

Much the same applies to Shia and Sunni Muslims. Their differences are 1400 years old.   However, in pre-invasion Iraq Sunnis and Shias could live peaceably alongside each other and young middling-to-poor people from the two schisms could actually marry each other.  True, in their case, Saddam Hussein, by birth a Sunni but in practice secular, together with his secular Baath Party kept the Sunnis down. Today in Hussein-free Iraq it would be impossible for Sunnis and Shias to marry. One or other — or both — would be assassinated.

As, almost certainly, a Shia Muslim would be in England if he entered a Sunni mosque to worship. Shias are conditioned from puberty onwards to worship with arms held at their sides. A Shia attender would be recognised immediately. The mosque managers or imams wouldn’t condone this, of course, but there are always fanatics in any sizeable religious congregation.

There are almost 3 million Muslims in England, mainly immigrants in the last 15 years, of which six out of seven are Sunnis. There are a few hundred Sunni mosques in the country but only a score or so Shia mosques. English Shias are worried by a widening gulf between them and Sunnis — caused mainly by what is happening in the Middle East — whereas Sunnis are worried about a widening gulf between the Bangladeshi and Pakistani majority among them and a growing number influenced by Wahhabism from Saudi Arabia — which country lavishly subsidises mosques and religious schools here.

While Christian congregations are declining in secular England, Muslim congregations are growing due to the fact that most are first generation and have slightly larger families. Also there are a growing number of English converts to Islam — albeit in very small numbers. The total population of Muslims in England will be growing for 20 or 30 years yet but will then decline as the first generation dies and the second and third generations — with smaller families — become more secular.

The vast majority of immigrant Muslims are well content that they are able to buy the full kit of consumer goods that is typical in an advanced country. In a few generations and intermarriage  they will as indistinguishable from us — the descendants of Roman, Danish, Celtic and Anglo-Saxon immigrants in times past. In the meantime, though, a few ‘rough edges’ which are against English law need to be knocked off — if  the police would only become more active such ethnic cases.  These rough edges include Muslim parents fixing their children’s marriages and also the practice of circumcision — otherwise genital mutilation — of girls, both cruel practices.

One very interesting — and surprising — feature of English Muslims is that, although most are still mainly poor, their children, and particularly girls, do much better at exams in school compared with the children of an equivalent 3 million English poor. This is no doubt due to stronger parental motivation. Thus, as well as an inexorable trend towards secularism, will mean that more Muslims will be able to break through the higher educational threshold of the social elite. Intelligence is thus becoming a much strong selective factor than it ever has been.

In due course, however, most immigrant Muslims will have fewer than replacement numbers of children — and become similar to the indigenous population — and they, like most of the population outside the elite will proceed gently to extinction in, say, 200 or 300 years. Until then it is to be hoped that the bulk of the population will continue to be kept at reasonable levels of welfare payments by the taxation of the elite whose advanced skills will be paying for at least a slight balance of payments surplus in trade with the rest of the world.

Who are the domestic terrorists then?

Referring to my previous posting it has been put to me that some of the 350 British Muslims who’ve returned from Syria may, in fact be potential terrorists. That may very well be so, but if all have been released after questioning by the MI5 — which seems to be the case — then it suggests that there are no, or very few, potentially dangerous ones among them.

In the last 12 months or so, rumour has it that six terrorist plots have been uncovered and neutralised — though we haven’t heard of any prosecutions — so one or two, or all, of these may be due to returned Muslims. But if so, why hasn’t this been mentioned specifically?

The conclusion I draw is that none of the returnees came back with the intention of being a terrorist here. Their subsequent activities would have been all to easy to shadow by the MI5. If any terrorist plots to be carried out here are currently being planned — as there probably are — then, like all those that have been attempted or perpetrated so far have been by those who have been radicalised at home.

Why are British Muslims returning from Syria?

It is understandable — though quite illegal — why young British subjects attempting to fly to Syria via Turkey should be prevented unless they have a very good explanation of why they are not going to support the Islamic State.

It is also understandable — though quite illegal — why young British subjects returning from Syria are arrested and questioned as soon as they get off the plane.

The reason why the authorities are acting illegally, though quite acceptable to the general public and the press — and even by super-sensitive ‘human rights’ lawyers –is that most pro-Islamic State supporters are males who are well under 20 years of age and are still impressionistic — very much so in the case of the more intelligent ones. There have been a few exceptions where girls and mothers have been concerned, but almost all have been far from being mature adults which starts at about 30 years of age in the case of men and about 25 in the case of women.

We are told very little about these MI5 operations and one has to be a quite assiduous newshound to get any information.  But as regards the first category what seems to be the picture is that, over the past two or three years, there have been about 850 adolescents and young men who went to Syria, presumably to support the Islamic State.  Of these about 100 have been killed in fighting and 350 have returned and. after questioning by MI5, resumed their former life in England.

None of this happened in the case of those British volunteers who went to fight in the Spanish Civil War from 1936 to 1939. They were free to come and go without question on the authority’s part, but none returned prematurely during the course of the war, unless injured. They stayed until the end. This suggests, in the current case, that those who have returned are at least nostalgic for their land of birth or, at most regretful at what they found in Syria.  We may take it that many of the latter, disillusioned with Islamic State, will be persuading friends not to go.

The African elephant and the rhinoceros are giving us a nudge

Various world bodies are now estimating the post-2008 world economic growth rate at about 1.5% p.a. of GDP — and that mostly due to China’s exports and imports. Indeed, it might become lower still if China’s rate of exports continues to abate.

Before 2008, and since the end of World War 2, growth rate was about 3% briefly touching 4% sometimes. Previously, during the latter years of the 19th century, world growth was about 4% p.a. briefly touching 5% or 6% sometimes. Before the industrial revolution, and for thousands of years before then, world economic growth was barely 0.5% at the very most, even then only spasmodically during the peak years of previously ‘high’ civilizations.

The present impasse in world trade since the 2008 Credit Crunch has been going on now for seven years. Many economists –apart from those employed by governments or central banks who have career interests — think that it might go on for another ten years, and some think it might be twenty — or more.

Could it be that world economic activity is already close to the steady state implied by the laws of thermodynamics — in particular, the law of least effort? It could be. In other words, was the industrial revolution a flash in the pan historically? In order to resume the rate of economic growth and establish the higher activity that most governments are looking for, then energy inputs would have to be raised two or three times higher than now.

Is this at all possible? Unlikely it seems to me without running into huge problems in the natural environment — degradations that we are only just becoming aware of because of our deepening knowledge of science. Besides, whether increased man-made carbon dioxide in the atmosphere is a cause of global warming or whether it is yet another symptom of waste heat generated by any energy technology — whether fossil fuel, ‘renewable’ or nuclear — is a moot point yet to be decided.

Now that there are now no new consumer goods to be discovered then, if we are to maintain roughly the same level of energy inputs, the standard of living of the whole world could be gradually raised if energy use could be better conserved. There’s a lot more scope for that.

Also by far, because scientific-man will continue to make breakthrough discoveries for as far into the future as we can foresee, we’ll also be able to greatly improve the energy efficiency of our production machines — probably in my view with the development of carbon-based materials made by DNA-based techniques — but otherwise just by improved automation from generation to generation.

Now that we face the prospect of the extinction of the African elephant and the rhinoceros and thousands more species, the earth deserves a break. The present post-2008 impasse and the possibility of a steady-state world economy might be telling us that the inviolable laws of thermodynamics are now working in the earth’s — and our — favour when thinking of survival over the longer term.

The Treehouse School

Following the education theme of the previous post, readers might be interested to read about what seems to me to be an unusually good primary school with dedicated teachers. This is The Treehouse School, in which one of this blog’s readers, James Robertson, is involved. One of its special features is an accent on outdoor education for the children — and, indeed, James and his wife have given part of his adjoining orchard to the school for their use.

The Treehouse School project, while remaining non-fee paying, seems a refreshing alternative to a state primary school and is well worth a visit if you’re interested in education. It’s to be found at https://thetreehouseschool.org.uk

Competitive education

In half-an-hour George Osborne will be delivering the British Budget. There is only one item of interest to non-~British readers. This is that all state schools will be released from local government control by 2020 and become Academics. Independent governors will be found and appointed. Thus for the first time since 1907 the curricula and the appointment of head teachers will not be supervised by government bureaucracy at both local and central levels.

We now have a chance that we’ll have a far more widely- spread spectrum of quality schools in all regions of the country. At present we have one or two dozen first-class secondary state schools — quite as good as the top private schools — but that’s all. They are almost invariably situated in the ‘leafy suburbs’ where only well-paid middle class people live and from which the pupils are enrolled.

Parents will now have a wider choice of schools for their children including more specialist schools than previously. Also good head teachers can be chosen who are not necessarily teachers by background. All first class organisations of any sort need chief executives who have even rarer abilities than those below them. There is no reason why good entrepreneurial or managerial types cannot now be involved in education.

If this experiment comes off then I can see several other advanced countries following in the coming years because competition between advanced countries is only going to become more intensive than ever in fighting for a share of trade with China and one or two more Asian ‘tigers’ for their physical exports.

Pitiable British Muslims

The Islamic Society at the London School of Economics has just held a Gala Dinner at the posh‌ Grand Connaught Rooms in central London. When the students arrived there they found that the men and the women were separated by a 7ft screen down the middle of the room. This was unexpected it would seem because one bright spark among them posted a picture on the screen that said “Hello from the brothers’ side” — making a humorous reference to a current pop song by Adele.

The headline of the story in today’s Daily Telegraph read, “Male and female university students are separated by screen at Islamic Society ball”. The more I read the story itself the more I realised that it was an attempt by the paper to arouse anti-Islamic feelings in its readers — that is, those readers who might have simply read the headlines, and maybe the first couple of paragraphs before turning the page and moving on. It was unworthy of a newspaper that is supposed to be part of the quality press.

The paper didn’t find anybody who was angry about the event. Instead it could only quote some academics who said that although the segregated event was unfortunate the Islamic Society was quite entitled to segregate the attenders if it wanted to. Perhaps the screen was intended just for the dancing part of the proceedings. Then it turns out late on the story that in fact men and women were able to talk together. So why the Daily Telegraph ran the story at all baffles me.

The only valid observation to make about this event is that the Quran has nothing to say about segregation of men and women at such events, even when at worship. It is a cultural accretion of Middle East Muslims only. In Indonesia — with a far larger population of Muslims — there is no such segregation. What’s so pitiable about the Islamic Society at the LSE is that it is following the mullahs of Sunni mosques in Britain by choosing to follow Middle East customs as well as the theological beliefs of Islam.

Why next week’s EU plan looks to be impossible

Next week 28 EU foreign ministers are supposed to agree the outline plan made last week between Angela Merkel and Turkey. The two main features of this are that (a) all those Syrians who’ve managed o get to Greece and are now trapped are to be returned to Turkey; (b) they, together with Syrians already in refugee camps in Turkey, will then be chosen — by lottery or assessment? — to go legitimately to the EU in the same numbers as those already mentioned in (a).

Ignoring all the intermediate logistical problems to do with the return of Afghans, Pakistanis, Iraqis, Iranians and all those assumed to be economic migrants — way too complicated to be contemplated here, never mind being discussed — is how are perhaps half a million (b)s going to be shared out among the EU countries? Most will only want to go to Germany, Sweden or England.

England won’t have them at all because it says that we are already taking in enough Syrian camp refugees. Germany and Sweden won’t take them because a rising tide of far right-wing opposition parties have arisen since Merkel came up with her idea of open doors four weeks ago. It is already obvious that many other EU countries will also not take any in by default. It looks like an impossible situation to me.

Meeting with the Pope, or Mr Xi

A set of three ghastly lithographs by Francis Bacon is to be auctioned by Sothebys’ later this month and, as usual in these modern times, will no doubt reach a farcical price. It is yet another reminder that very rich individuals are prepared to pay enormous prices for some items that, for one reason or another, become fashionable as status goods.

Fred Hirsch, a brilliant economist at Warwick University who died tragically young wrote The Limits to Growth in the 1960s in which he supposed that a shortage of status goods in the future would take away the incentive for ambitious people to become rich. He thought that economic growth would suffer as a result of this. But he was thinking of status goods that were more traditional in his day — countryside mansions, houses set in beautiful sea coves, luxury yachts, Rolls Royce Silver Ghosts, flawless diamonds, rare first editions, and so on. He hadn’t accounted for the way aesthetic tastes could change, usually set off by high society and rippling downwards, as fashions are wont to do.

In particular he hadn’t noticed that modern ‘serious’ art was taking off. Yes, there was already a high-priced high-status fashion for Picassos, Salvador Dali and Jackson Pollock but since the ’60s and ’70s we’ve also had a thousand more — nay ten thousand more — artists in recent years who’ve been passing off their products as great art and obtaining risible prices in galleries and auction. But because the very rich have been buying them they’ve not only become high status goods but they have also altered the whole cultural appreciation of art above the educated upper-middle class and above who care about status a great deal more than most of the population.

But what if the whole world became sceptical about the pretence status goods, and art became valued more for its breakthrough at the time of execution and the skill used? What would the very rich do for top status signs? We already know because they are even rarer. When a rich person walks another round his home and gardens and proudly shows one prize item after another, what is the one he arrives at finally — the acme of them all? It will be a photo — or, these days, a video — of when he met the Pope, or the American President, or the Dalai Lama or (at least for the next few years) Xi Jinping.

If economic growth ever ceases to grow — at least in the way we presently measure it in GDP (money) terms — and which I happen to believe that we are close to already for entirely different reasons — then it will not be because of a lack of status goods.

Put those warehouses underground!

George Osborne, our finance minister, normally someone who looks at expenditures very carefully is actually thinking of spending £75 million on an 18-mile road tunnel under the Pennine mountains of the Peak District. The existing Snake Pass and Woodhead Pass are often dangerous in bad weather conditions. Psychologists have, however, warned that 18 miles might cause concentration difficulties to drivers. That might well be so and is obviously something that needs to be researched.

Nevertheless, tunnelling technology has improved in leaps and bounds in the last few years with harder and better designed cutting heads. Except for a hard rock premium tunnelling costs are not a great deal higher than road or railway track building on the surface. Even there a great deal of hill-levelling and valley-filling has to be done.

I would like to see environmental interest groups talk of tunnelling more often, especially where — increasingly in this crowded country –where areas of great ecological importance are concerned. It is too soon to expect the general culture to become as sensitive to tunnelling possibilities as it is towards to saving the environment more generally, but a great many other things could be put below ground than just roads and railways. Huge warehouses, now springing up everywhere, would be just as efficient under the soil. Large factories — becoming increasingly automated — too. We should also have been burying our electricity grid a lo ng time ago. All this will be second nature to our descendants in a few generations. Let’s start raising consciousness now.

Breeding for intelligence by the elite

Adult males who are fit will tend to have sex with any female given the opportunity — with a tendency, if given a choice, of choosing a female who is young and beautiful. The reason why this trait has been selected over the course of millions of years is that younger females can give birth more easily than older women, and also that beauty is genetically correlated with good intelligence and health.

Thus tribes in which the males are a little more particular with whom they mate will thus have progeny who are slightly better endowed physically and mentally with tribes with less fussy males. The former will tend to survive and become the norm in our species.

On the other hand, females — who actually initiate the choice of sexual partners — are less fussy than males about good looks, though more fussy otherwise.  They are said to choose “character” by preference.  What they actually mean is that they choose males who are likely to be good providers to them and their children, so they look for good mental traits and also males who tend to be higher up in the socio-economic pecking order.

Even the minority of women who have an occasional fling outside their marriage — about 25% in modern advanced countries according to several large anonymous polls — will choose richer or more powerful males than their husbands just in case they have to fall back on them for financial help if their marriage blows up.

I’m reminded of all this by reading this morning that yet another controversy has erupted at the annual Crufts dogs show where dog breeders have been concentrating on good looks rather than fitness. Issues such as breeds with weak hind legs due to too much in-breeding are showing up again despite promises made some years ago. Sometimes dogs can’t even walk properly.

As we being to understand a great deal more about genetics in the coming decades we can be sure that young women of the social elite will become even more particular whom they choose as partners. As well as dependability and economic competence you can be sure that intelligence will become an increasingly important trait they’ll be looking for in order to maximise the chance that their children will be able to remain in the highest social echelons.

Looking after tax havens

I have little time for Oxfam and similar do-gooding agencies because they de-incentivise the recipients from searching for their own solutions. They are indulgencies for middle-class people with time on their hands and they are patronising to their recipients at best and counter-productive at worst.

Oxfam has just published an encyclical against tax havens which, they say, deprive the Treasury of income. But this only assumes that this and other advanced governments, whether left- or right-wing, actually want to get rid of them. Despite frequent pronouncements from the G20, OECD, think-tanks and senior politicians (when under stress) that tax havens should be universally outlawed, governments will continue to need tax havens.

At a personal level, tax havens enable the most brilliant individuals in an advanced country to remain comfortable while still working there — to the benefit of others as well as themselves. At a corporate level, tax havens are convenient things to blame as governments compete with one another — as is natural — in taxing corporations differentially in order to attract those hey want to their domains.

Positive reasons for leaving the EU

Too often the reasons given by those who want to leave the EU are negative — the desire of getting out of the clutches of the Brussels bureaucracy, etc. Instead, those in favour of Brexit ought to be putting forward positive reasons why independence could be so much better for us.

For example, one of them –if not the main one — is that we still continue to treat China so distantly, even patronisingly, when it is by far the largest future market in the world for advanced services such as in education, digital, neuroscience, equity law, environment and genetics in which we are well poised.

Germany is still doing well by means of exporting advanced engineering and machine tools to China but these physical goods will be copied and Germany is by no means as well placed as we are in services. China is large and varied enough to become almost a world market in itself for at least the next 50 to 100 years — as it was before about 1750 — before it releases itself from Confucianism and catches up in innovative ability.

Turkey can’t be trusted

Now that we see Turkish coastguards firing high pressure water jets at immigrants’ dinghies trying to reach Greece and others trying to smash immigrants’ engines, is it any wonder that many immigrants are rumoured already to be drowned? Can any responsible government in the EU rely on any sort of agreement with the Turkish government? Last week the EU — Angela Merkel actually — asked the Turkish government to prevent immigrants actually setting out from the mainland.

Is Turkey, a sizeable country with sizeable security forces, unable to do that? It is a country that is now sliding back from having a secular government a few years ago to becoming a religious one. And we know, in Europe, just how nasty religious governments can be. If the EU foreign ministers meeting next week make any further agreements with Turkey then the EU is in an even worse mess than ever.

How digital currency will come along

In my morning paper I read that teams of software writers at University College, London and the Bank of England are presently devising a new digital currency. Called RSCoin, itt would have the virtues of Bitcoin — ease and cheapness of money transfer from person to person — without its big disadvantage to governments — money transactions that are invisible to anybody but the transactors.

What UCL and BoE are proposing would be similar to Bitcoin, except that the comprehensive ledger of its currency movements would not be spread around among all users’ computers and smartphones — thus making the currency counterfeit-proof — but would be lodged exclusively with the central bank — thus making all transactions visible to governments for taxation and other purposes.

They are planning a trial in 18 months. Dr George Danezis, heading the university team, has says that, “My advice is that companies should play close attention to what is happening, because this will not go away. . . There are Visa, Master and PayPal. These are the sorts of guys we are to disrupt.”

Such a currency would also reduce a great deal of banks’ transactional services for their customers. If it comes off, RSCoin would be a major disruptive technology by which, as Schumpeter used to say, the world economy takes a leap forward.

But will RSCoin take off? It’s hardly likely — at least as Dr Danezis envisages it — because it would have to be a world-wide currency. The idea that the individual central banks of all the countries of the world would submit themselves to the ledger held in one controlling central bank simply wouldn’t happen.

Governments, as a scaled-up versions of man’s intensive ‘groupism’ are fiercely territorial and always competitive. Agreement between them has to be something of huge mutual importance, and then usually only of a provisional or temporary nature — but giving up currency sovereignty, never !

What could happen, however, is that if a monetary catastrophe worse than 2008 came along and this time paralysed world trade — which the 2008 debacle was within two days of doing so — then if some of the largest multinationals were to impose something like RSCoin on tbeir customers and suppliers then governments would have to make sure that the exchange value of their traditional currencies didn’t go out of line with that of RSCoin.

That could be established very quickly just as soon as food, priced in RSCoins, reached the supermarkets.

Perhaps a war in the Middle East is a necessity

Anybody who writes about Jews ought to declare an interest if they have one. My own is that two British Jews went out of their way to help me — when other ‘friends’ didn’t — at two crucial junctures in my life. Otherwise, I and my family’s forebears have not been related to Judaism for as many generations as I have knowledge of. Even so, I have found other individual Jews to have a certain arrogance which is unattractive and some present-day Israeli policies which are unworthy.

Nevertheless, I have often pondered why Jews have been so hated by so many other ethnic and cultural groups since Medieval times. Without going through several possible reasons that have occurred to me from time to time I have gradually fallen on one which I think is important. This is that they are clever, particularly in modern times among the Ashkenazi branch of Judaism — that is those who’ve descended from mid-European Jews, themselves descended from a few thousand Jews invited to migrate from Palestine to Poland at around 1100.

The Ashkenazi Jews were barred from being farmers — the common livelihood of most in Poland and, of course, the means by which some of the extremely rich Polish families had become powerful. They were invited as, and remained, as noted scholars and therefore good advisors for the rich and powerful in Poland.

The same Jews, however also went into finance and banking — in a strange way. Ever since Abrahamic times they — rather like Muslims today — were forbidden to charge interest, or usury, to one another. In their case a minority got over it by only charging interest to gentiles if they lent money or paying interest if they borrowed money. This meant that those who managed to achieve these financial dealings became brilliant financiers and bankers and from time to time — usually in period of economic stress — became hated by the majority of gentiles around them.

The edict against usury also meant that the majority of Jews — who couldn’t lend or borrow from one another — were very poor at starting or growing businesses and, during periods of stress and being persecuted by gentiles, started huddling together in ghettos in all cities and sizeable towns and cities. But they still respected cleverness and scholarship.

This was the reason why, when America threw its doors open between 1870 and 1920 to the poor of Europe, millions of Ashenazi Jews migrated there and, in due course, second and third generations began to do well in universities and other highly skilled professions as well as getting to very high levels in the American civil services. This latter development also explains why, up until about the 1970s, America’s anti-semitism finally switched around and America begin to be a strong ally of Israel. It is also the reason why there is now a great deal of joint research — particularly into weaponry — between America and Israel.

There is a term in psychology call displacement. A good example of this is shown in the classic cartoon where a husband, who’d just been chastised by his wife, kicking the family cat. In the Middle East, the Sunnis hold the Shias in contempt. Although there’s animosity on both sides, the religious ayatollahs in Iran spend most of their time expressing their hatred of Jews, not Saudi Arabians — which you could expect them to. I also think that the Iranian hatred of Israel is fuelled by envy at what Israeli has accomplished technologically.

If ever there’s going to be a war in the Middle East beyond the present one against Isis then I feel that some dispute between Iran and israel will have tripped it off. In that case, Saudi Arabia will join forces with Israel — there is said to be a secret treaty between them already — and, if the American president following Obama is inclined to join in it is highly likely to do so against Iran.

As usual the whole affair would be a tragedy but I can’t help feeling that it would catalyse a great many other problems which at present seems insuperable. among these will be a final closure of the Sunni-Shia hatred, vital educational and political reforms in Saudi Arabia, Iran, Jordan, Lebanon and Turkey and some sort of settlement of the Palestinian question. I wouldn’t condone it but perhaps a war in the Middle East is a necessity.

Letting the Queen fade away

Man is so credulous — so susceptible to mass influence — that the Queen occupies a hugely important place in the minds of millions of people in the country. Thus when the Queen is reported to have allegedly said some years ago that she didn’t think highly of the EU all hell has been let loose in the camp of those who want us to vote to stay in the EU on 23 June.

The reporting of the Queen’s opinion — which is probably correct — is, however, now being manipulated as though it is an attack on the Queen herself and her role. “Palace fights to save Queens independence” are the headlines in today’s Sunday Times. A sub-heading reads “Brexit row has damaged her, admit courtiers”.

Considering that, in reality, the Queen has no political power at all and that her role is purely ceremonial then does it matter what she thinks on this issue or that? Of course not. To deny her the right to an opinion is to deny her the rights of her meanest subject.

What the rumour has done is to make a breach in the wall of confidentiality that the royal civil services erects around the Queen in order to monopolise every last personal detail about her. She must remain informationally sanitized because royalty is still useful as one of the civil service’s strategic ‘weapons’ in running the country unobtrusively..

Royalty is a left-over from Medieval times. I’m not in favour of getting rid of royalty in a dramatic way by, say, legislation. But there’s no reason why British royalty shouldn’t be allowed to fade away by giving each of them more personal freedom and not be under thc hour-by-hour control — for that is what it is, literally — by civil servants. The Belgian and Norwegian royals, among others, are going that way and we ought to be doing so, too, in order to show that we’re a grown-up country and not subject to vapours.

Culling the young and the old

Cultural attitudes to the helplessly old or the handicapped newly-born have changed enormously in the course of the industrial revolution.  As we have become more prosperous we could more easily carry the economic burden of looking after old people — even if they are in a vegetative state — and devising expensive procedures to allow us prevent handicapped children being aborted or dying at birth.

However, neither of these categories, if they survive, vote at election times and so, if times become economically grim for us, less government expenditure needs to be directed to them. This is why our Finance Minister George Osborne, is expected to reduce welfare spending by about £1 billion in his forthcoming Budget to the physically disabled in order to give a better tax break to the highly-paid — who most surely vote at election times.

Osborne is actually onto a ‘winner’. Although there’ll be a great furore by some of the middle-class who take an interest in these things, most of the population will keep their heads low and go along with it. The reason is that we have a natural aversion to the physically handicapped. Because of our politically correct atmosphere at present this attitude dare not be expressed — not yet, anyway.

However, as anthropologists inform us from observations of hunter-gatherer tribes all round the world, it was never thus. Early man had no scruples about culling handicapped children — and even to culling one of a pair of newly-born twins — or old people who could no longer look after themselves. Tribes that were too solicitous couldn’t survive in competition with others. Over the longer term, the differences between them in saving energy over the caring tribes , even though marginal, would have been decisive.

In the coming decades as the (vaguely) 30 or so advanced countries compete increasingly fiercely in the development of scientific research and sophisticated services — in order to trade with the Asian ‘tigers’ for physical goods — then we’ll find more finance ministers following George Osborne lead kin reducing welfare spending — and indeed taking it further in the years to come.

Why socialist society never works, nor can poor countries be helped

Why what we call the Third World countries — and, maybe, even Second World countries also — will never reach the standard of living of First World countries until their populations become a small fraction of their present size is due to the fact that they can never build up sufficiently deep centres of scientific research.

Such research is needed in order make discoveries and develop innovations that are sufficiently valuable to cause First World countries to trade their products instead of, as now, largely ignoring them — apart from importing any low value mineral resources that may be required.

But surely, it might be objected, some progressive Third World governments might decide to send some of its brightest children and young people to be educated in First World schools and universities. This is, of course, what at least two Second World countries are doing already in a major way. But what if the most brilliant of scholars these are offered jobs or research grants and decide to stay for the benefit of the host country?

This has been happening for many years in the case of Japanese, Chinese and South Korean students and most of them — called ‘land turtles’ by the Chinese — including some brilliant ones, return home afterwards. But, as also happens, none of these countries, although very good at replicating the research and technologies of First World countries have not yet been able to spark off any uniquely new innovations or develop new technology sectors.

To some extent the lack of creativity in those three Asian countries can be blamed on their particularly austere brand of Confucianism but some further reflection shows that this can’t be totally to blame. What about the relative lack of creativity of many European countries? Northern European countries such as Britain, Germany, France, Belgium, Netherlands and Denmark, together with North America — have accounted for almost all the major scientific discoveries and breakthrough ideas in the world in the past century, right up to the present.

Why haven’t the close neighbours of the above — Ireland, Italy, Portugal, Spain, Poland. Czech Republic, Slovakia, Austria, Hungary and Slovenia — not been creative also? They all have first class universities and each will have some world-standard research scientists. What they lack, however, is scientific-cultural depth — as with the Asian trio — compared with the northern rim European countries where the resistance to the Medieval Church first took off, where the Reformation happened and where sufficient numbers of independent minds and scientists could became concentrated from about the 1600s and onwards.

But why can’t First world countries help Second and Third World countries? After all, they make a point of sending aid to them and, indeed, via the IMF, World Bank and other international agencies send them financial aid and technical help of all sorts. Moreover, there’s no secrecy of scientific discoveries in the West. It’s all available in the scientific journals. First World governments wouldn’t be averse to loaning some research scientists for a year or two — if the latter were willing to go.

Even so, as well as a lack of scientific-cultural ‘depth’ in most countries there’s a ‘horizontal’ aspect to be considered these days. A few individuals, however advanced in a particular research area, are usually insufficient. The days of single researchers, or ones and twos, working in garrets, or bedrooms –like Isaac Newton — are long gone. Teams of other specialists — and often sizeable ones — are normally increasingly necessary to control sophisticated aspects of an experiment for the leader.

There’s yet another ‘besides’, too. Every known area of scientific research is well and truly covered by the four or five leading First World countries already. How would a Third World country know what research to back? Also, very often, brand new research possibilities or whole new sectors are by-products of existing scientific projects — and so will be discovered by First World scientists first..

In theory, the First world countries ought to be able to help the Second and Third World countries considerably but they cannot do that whole-heartedly for the same reason is that the elite of the First World countries cannot whole-heartedly help the poor in their own countries.  Instinctively we are hierarchical most of the time — taking advantage to a greater or lesser extent of social levels below us — allowing our altruism out on short excursons.

This country’s government is proud that it’s the most generous of all First world governments in giving foreign aid, yet it’s no more than a paltry 0.7% of our GDP ! It can give no more than that or their electorate will kick up. In the same way, the EU, after one bout of generosity to a few thousand genuine Syrian asylum seekers is already cutting it short.

We will have to get used to our genetic propensity to rank ordering and cut our cloth accordingly. Socialism is fine at family level or local community level when you know people well enough to decide whether you can trust them or not — that is, whether you want to be altruistic or not. Otherwise, in any larger organisation there are bound to be free-loaders. They may be few and they may not impose too many financial disbenefits on the community, but emotionally they are demoralising.  This is why socialist society never works — trust breaks down.

What the rich really inherit

Some recent research by Simon Boserup and others in Denmark show very clearly that wealth differentials are not passed on to their children if the lifetime of the latter is considered. This is interesting but not surprising. Passing on one’s assets to one’s children is genetic in exactly the same way way that passing on one’s hormonal proclivities — adrenalin in particular when thinking of social inequality — is also genetic.

They are very rare parents who don’t pass on all their wealth to their children or grandchildren. It’s rather amusing that when one hears of some fabulously wealthy — such as Gateses — who declare (ostentatiously) that their children must make their own way in the world happen to leave a few ‘crumbs’ (a few hundred $million n their case !) to their children after the $billions have been distributed.

As to Piketty, the modern-day Marx who thinks that wealth differential are growing I’d have thought by now that someone would have told him to read a bit of history beyond the last 100 years. The 1% of the world’s rich today, relative to the ordinary poor, are nowhere near as rich as the richest 1% of Victorian England. And the further one goes back in time the larger the wealth differentials become.

Returning to today, in practical terms the handing on of wealth is more of a proclivity for wealth rather than a certain absolute gift. It is only very rarely indeed that inherited wealth remains cohesive without declining, usually quite substantially, in the course of the recipient’s lifetime and often totally so. What wealthy people give to their children by way of bringing them up with social ease and confidence plus a parental network of potential friends and sponsors is far more important than any wealth that’s inherited.

Pope Francis putting his foot down

Late afternoon, I’m still startled about a story of corruption going on in the Vatican that I read earlier today. It’s not that corruption is going on there. I think we can take it that,  in any semi-isolated institution with access to a lot of money, there is going to be corruption going on somewhere within it. For example, the EU Commission in Brussels is refusing to be audited. There’s a lot that’s still dodgy about extraordinary claims for ‘expenses’ by some of our MPs.

In the Vatican, the corruption has been going on in the department which ought to be its purest. This is the Congregation for the Causes of the Saints, otherwise known as ‘the Saints’ Factory’ ! It’s where they prepare the evidence for sainthood — blameless lives led, at least a few miracles achieved and so on. It’s all treated very seriously, of course, because there are all sorts of commercial consequences if this person or that person is canonized and can thenceforth lend a name to a charity or a particular destination for pilgrims.

The person who is to be canonized can’t be doing the bribing, of course, because he or she is dead, perhaps decades previously. But some people who feel strongly about this or that person being promoted after the event, as it were, are apparently prepared to pay a lot of money to accelerate the whole bureaucratic process along. On average it costs someone £500,000 to ensure that their candidate acquires sainthood.

Anyway, Pope Francis has put his foot down and has added 23 new rules that must be met by any candidate’s candidate for sainthood. Good for him. Or will it simply raise the amounts of the bribes that someone needs to pay? A pity the Pontiff can’t be as decisive about the whole matter of hundreds of thousands of sexually frustrated celibate priests all round the world with the ever-present temptation of paedophilia and allow them to be married. Perhaps in time he’ll get round to that. The politics going on in the Vatican must be among the most formidable of any organisation in the world, with hundreds of cardinals and other bigwigs networking all the time and with no wive snd children to go home to at the end of the working day.

Adjusting to a new era

There’s some talk in America that Ted Cruz might, in fact, become the Republican choice for president — but, for many of the intelligentsia, his ideas are even worse than Trump’s. I wonder what either of them would have to say to the notion that the industrial revolution (1780-1980) might have been a unique historical era which only came off because a few advantageous factors acted simultaneously.

Now that the typical consumer/worker in the advanced countries has the full kit of aristocratic status goods, including his coach and horses — and is largely satisfied in that respect — and when automation is marching relentlessly into most jobs, then we’re now into a new era in which considerably higher standards of education will be necessary for all those who want jobs that are both satisfying and well-paid. In short, intelligence and some allied traits such as conscientiousness and stamina are being selected as never before in man’s evolutionary history.

The irony is that Donald Trump and Ted Cruz are, together with Justin Welby yesterday, speaking a lot more realistically about mass immigration and the consequent fears of ordinary folk than intellectual think-tanks are. As we adjust to a more highly professional post-industrial era, the bulk of the populations in advanced countries already have a lot of worries and frustrations before them without yet more immigration.

The indigenous masses are adjusting as quickly as they can by steeply reducing the size of their families. The elite ought to be more patient and allow for the occasional Trumps and Cruzes to disturb the peace while the masses reduce their populations to zero in the next two or three generations. As Mervyn King says in his The End of Alchemy (p 19) “If capitalism [KH: that is, the industrial revolution] did not collapse under the weight of its own internal contradictions, neither did it provide economic security.”

Will Obama be another Clinton or another Carter?

Oh dear ! America and Britain have fallen out in a big way ! Correction — President Obama has let loose what he really thinks of this country and its colonizing past. When he told Atlantic magazine that Britain and France had made a mess of their stewardship of Libya once Gaddafi has been overthrown, it was immediately followed up in a flurry of diplomatic notes between America and this country to say that both countries were still the best of friends and that they still had a ‘special relationship’ !

Obama must have deeply angered David Cameron — or, rather, George Osborne, the real Prime Minister) a great deal for all this reconciliation to have erupted. But, traditionally, America has always felt the same about this country ever since it fought us for independence in the 1780s. America was particularly hard on us during the Second World War when, at the Bretton Woods monetary conference in 1942, Harry Dexter White almost hammered our chief negotiator, John Maynard Keynes, into the ground when making sure that only the American dollar, not the British pound, would reign supreme as the dominant world trading currency from then onwards.

There has been no ‘special relationship’ between the two countries, apart from many personal relationships and the common language. It was Winston Churchill who made the first claim to s special relationship, and several prime ministers since, but no American president as made a big deal out of it.

So there was nothing surprising in what Obama told Atlantic. What I find interesting is that Obama, now in his final year — with a certain place in the history books due to Obamacare — is letting his hair down. I’ve been greatly intrigued by Barack Obama’s personality. He’s always seemed excessively guarded to me but we might see more of it between now and November when the next president is chosen. Will he be inclined to become a fortune hunter like Clinton or will he still want to be of public service like Carter? I couldn’t bet either way at present.

A half-truth by the Archbishop

It’s not often that a religious leader goes beyond platitudes and says something that is relevant. The Archbishop of Canterbury, Justin Welby, wrote yesterday in House magazine that British families are “entitled to fear the impact that enormous numbers of migrants will have on jobs, housing and health care.”

It’s the fear of impact on jobs mainly — particularly these days when the bulk of jobs are becoming increasingly down-skilled and thus able to be done by agricultural immigrants with few modern skills.  Fear of impact on jobs — and thus ability to earn money for food, etc — is exactly the same as the fear of early hunter-gatherer tribes about losing their land — their only guarantee of food — when another tribe approached too closely.

The fear is strong and permanent enough to be called an instinct — so universal in all cultures it is, and so comprehensive it is at all social levels within every culture, whether of highly sophisticated professional institutions at the top or crude trade unions at the bottom.

But it’s also about tribally protected culture as well as tribally protected jobs. In post-industrial times most income-earners have now reverted to hunter-gatherer daily patterns in which we spend as much time and effort in leisure pursuits as in working.  When faced with massive immigration from the outside, the way an indigenous culture might lose its own local ways of socializing and relaxing is as disturbing as the jobs issue.

It’s actually the cultural part of the problem that Archbishop Welby didn’t mention. As he must spend most of his time thinking of how Church of England churches can recover the congregations of the past — particularly of young people — but getting nowhere — the matter of cultural change must be a sensitive spot for him. “M’mm . . . I’d better not mention that aspect . . . !”