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The FED is Trapped

Current AffairsPosted by Nico Metten Sun, September 20, 2015 12:51:34
The long anticipated 17th September final came. A lot of people thought that this would be the most important date of the year. The FED suggested that on this day they might final start raising rates from its 0-0.25% range by 25 basis points. And unfortunately, many people still take this committee of central planners seriously. They didn't raise, in case you wonder. And I doubt that they will be able to raise in the future.

The reality is that the FED is trapped. The keynesian claim that it is possible to print an economy to prosperity simply is not true, in other words it is a lie. This lie however is so sweet that many people just really want to believe it. But the difference between reality and the keynesian model is slowly getting so absurd that even the biggest dreamer cannot ignore it anymore. And so this Thursday was probably a big steps towards waking people up.

The fact is that the US government has to cook the books to even make it look like there is a mild recovery going on. The measure of inflation is constantly redefined, to make it look lower than it is. This is done for example by so called Hedonic Adjustments. If a product in the basket of goods that is suppose to measure inflation is getting more expensive, it is simply being replaced by another that has not gone up in price and that the government thinks is equally good. So if for example beef is in the basket and goes up in price, but chicken is not in the basket and does not go up, then beef is replaced by chicken in the basket. The idea is that consumers can then substitute chicken for beef and therefore do not experience inflation. So you better like chicken! A cheeky trick to get a lower inflation rate. And that is just one of them.

The unemployment rate is another important statistic that is manipulated. If someone hasn't found work in one year he is simply kicked out of the statistic as if he is no longer looking. That way the US now has an official unemployment rate of 5.1%. This, by historic standards is a really low rate that suggests that almost everyone who wants a job will find one. A good statistic to show how absurd this number is, is the labor participation rate, that means the rate of Americans in employment. That rate is at an almost historic low of 62.6%. How does that go together? The answer is that 5.1% unemployment is a fantasy.

Remarkable is that despite all the manipulation going on, the official growth of the US economy is only about 2% per year. That is of cause measured in GDP, which is a completely useless unit of measurement in itself. GDP does not measure the productivity of the economy. All it measures is the amount of money that is circulating. That means that if for example the government spends money, even borrowed money, it will show up as GDP growth, independent of how productive the money is spend. The government could employ people to dig ditches and others to fill them up again. The productivity of this work would obviously be negative, but GDP would still go up. GDP also goes up when unproductive asset prices like house prices go up. Amazingly, even though GDP can be manipulated, all the intervention by the government have not managed to get this statistic significantly up.

The FED is trapped. The interest rates in the US have been at 0% for over 80 month. In addition to that the FED has pumped over 3 trillion Dollars of printed money into the economy. And all that has done is to create official growth number of about two percent. The only effect it really had is the inflation of huge bubbles in bonds and equities. The reason for that is that the economy is simply at peak debt. Even at these low interest rates, people and companies cannot borrow more money, because they already have too much debt. The only people who can still borrow money are the financial sector who really gets this money for free and of course the government. Since they cannot kick start the economy again, the official line has been that as long as the stock market is OK, the rest of the economy cannot be too bad.

The trouble is that these bubbles are dependent on cheap money. In order to keep them inflated not only do interested rates have to stay as low as possible, they will soon have to start a new round of money printing. That is a problem, because in the long run, printing money will undermine the trust in the US Dollar. So far that has not happened, because the FED could make everyone believe that it has an exit strategy. Once the US economy is growing, it will hike rates again and buy back all the printed money.

But as I explained above, the US economy is very weak and based on debt. Therefore, if debt gets more expensive the rest of what looks like a productive economy will simply implode. If however they do not hike rates, then more and more people will realise that the exit strategy is not real. Therefore it will undermine the confidence in the Dollar. That way the US economy will also implode. So no matter what they do, it looks like that keynesianism has finally checkmate itself. With this month FED decision to rest rates at 0%, more and more people will realise that the economy is worse than it seems and that the FED is not really in control of the markets.

My guess is that they will not hike rates voluntarily. Eventually of course the market will force them to. There is a small possibility that they will raise rates by 25 basis point in the next few month, but even that is unlikely. The reason is that if they do raise rates, the economy will implode and they will immediately have to reverse the rise. That will make it look like they do not know what they are doing and undermine their credibility. And they cannot really raise rates without a really strong economy, because the US government is highly indebted too. That is the difference to 1981, when then FED chairman Paul Volcker raised rates to 20%. At that time the US government did not have a debt problem. Now they have one and if the economy implodes, tax revenues will go down and dept/GDP numbers will rise, making the debt situation of the government worse. If simultaneously interest rates go up, the government will quickly have to declare bankruptcy. And since the government has more guns than anyone else, they will get the policy that is best for them, that is low interest rates and lots of money printing. So hold on to your hats, there is an inflationary storm coming.

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John Gray on Hayek

Current AffairsPosted by David McDonagh Mon, August 24, 2015 20:40:09

On 30 July 2015 in The New Statesman John Gray wrote about “The Friedrich Hayek I knew and what he got right.” He has written many books since he publically announced that he was no longer a libertarian when he got to rather like New Labour in the 1990s. He has since become an admirer of James Lovelock, and so become keen on Green ideas. None of the books he has so far seem to be first rate. Many of them even seem incoherent and rather like rushed hack writing, but the author seemed to find his changes of mind rather productive.

Below, I criticise a recent New Statesman article of his where he, once more, has attempted to assess the liberal idea and why it was so inadequate. What seems to be truly inadequate is the account that Gray has given in his articles and books on pristine or classical liberalism. His latest account reviewed below is no better than what he said on the topic in his many books but seems, nevertheless, to be worthy of comment, as do Gray’s books.

Gray sees Hayek to be of the “New Right” of the 1980s but he called it classical liberalism at the time of his enthusiasm and that was the historic old left. Gray had been a Labourite earlier, which sprung from a tradition that owed a lot to the statist sea-change that began to emerge in the Liberal Party in the 1860s and had almost totally taken over by 1900, before which we might refer to that Party as still largely classical liberal as opposed to statist modern liberalism that was dominant amongst the leadership, as well as amongst the younger members, by the great free trade election victory in 1906, making it something of a swan-song for free trade; though the actual leader, Henry Campbell-Bannerman, was still mainly a pristine liberal. What revived in the 1970s was the pristine classical liberalism.

Gray says that many of those libertarians, called such to distinguish themselves from the statist modern liberals, said that Hayek only valued the state for three things: national defence, law and order and opera. So Hayek was an economist and philosopher that stood for a freer market, if not quite complete free; where freedom was simply freedom from the state. But he was not an anarchist, so Hayek did not see the state as an unnecessary evil. Like the early Tom Paine, Hayek saw it as a necessary evil. Most classical liberals were like that. With Locke, they realised that we could have civil society without the state but they thought that because of crime, the state could be a boon. So reluctantly, they thought that the state was a good thing but only owing to the problem of criminal activity being almost certain to emerge. Since the liberl revival that Gray joined, many have thought that the state is not so good at countering crime. The anarchist contingent is a significant part of the revival.

Gray feels that this pristine liberal paradigm came to power in 1979 but the reality is that it was the Conservative Party that came to power at that time and about half in that organisation did not like pristine liberalism one bit, and the people who liked it, like Mrs Thatcher and her mentor, Keith Joseph, they were flirting with it rather than seeing it as the main thing; but many both in the Conservative Party as well as in the mass media and the rival political parties rather feared they did take it as the main thing. However, pristine liberalism was a factor. It has remained one since.

Gray feels it is important that Hayek was an Austrian, despite him becoming a naturalised British subject. Hayek was born in Vienna, where opera was all-important, in 1899. His father was a medical doctor and his mother came from a wealthy family. Gray seems not to know that liberalism was in decline from about 1860, and that, thereafter, statism was the new fashion. The inter-war years would become nationalistic as a result, for, in practice, socialism was mere statism thus usually more nationalistic. Socialists do not always agree and protest quite the contrary but in 1914 quite a few such socialists, including Prince Peter Kropotkin, largely shed socialism to support the nation state they denied they had owed loyalty to for decades. This was a big shock to those who remained anti-nationalist but they were a minority.

Gray says that Hayek saw the civilisation he grew up in collapse, but it was the war that removed the form of state, and liberalism had been ebbing for over fifty years before 1918. Hayek’s homeland was on the losing side of the war but that is a bit different from a collapse, as Gray imagines, or at least says, as it was not owing to the sort of imaginary perennial fragility that he refers to; which is a major Tory idea and one that looks clearly false to me. I think the Whigs were right that society is far sturdier than the Tory meme has it, such that a great war, like the 1914 war, could cause it to collapse. War does change society but it is not likely to end it.

John Locke was right to hold that civil society was almost perennial being in place long before the rise of the state even if he errs, as David Hume made clear, on social contract theory. The usual respect we show others in society, that we peacefully pass them in the street, do not bother them if they do not bother us, form what the sociologist might call the norms of civil society, and those basic norms are not far off the liberal norms as well as being those of civil society. As Adam Smith said, there is a lot of ruining in a great society. It is not fragile.

Gray says he first became interested in Hayek in the early 1970s. It was owing to his interest in pre-1914 Vienna as much as in the rising paradigm of pristine liberalism in the 1970s UK, he says. He met Hayek at the end of the 1970s and asked him if he knew Karl Kraus, a famous journalist of Vienna before 1914. He was told that Hayek had seen him but that he did not really know Kraus.

Gray says that Hayek had independence of mind and this allowed him to face up to a lot of opposition and criticism including big changes of fashion. Gray feels the paradigm of Woodrow Wilson’s national self-determination imposed by the USA after the war on Europe was one that posed problems for Hayek for the rest of his life. He died in 1992. But he never could see how liberal values got on with tribalism, says Gray.

On the fall of Wilson, the USA, wisely, went back to political isolationism [with free trade, the liberal meme on international relations].

Hayek’s ideas on evolution and on the ideal liberal constitution were not germane to that main problem, Gray says. Hayek had dropped his early socialist ideas owing to the economic calculation argument [eca] put to him by Mises. This seemed to Hayek and many others to be an effective refutation of socialism so he ceased to be a socialist. He afterwards adopted liberalism, and Gray said he made it into a sort of scientism; this is most ironic as Hayek was a major critic of scientism, Gray openly admits. It was held by Hayek to be the inept attempt to apply science to the human world. It was an example of Hayek often called a mere pretence of knowledge when he was looking at the socialists. However, Gray’s account looks weak there, as it so often does elsewhere.

In what sense did Hayek lose the debate with Keynes? Did Keynes win it? Keynes rejected equilibrium but, as he was a coward, he did it by picking on Say’s Law, which few had heard of, and he gave an inadequate account of it, and Keynes also gave an inadequate account of the orthodox economists in general, calling them “the classsics”.

Ironically, John Hicks, who thought he was going over from Hayek to Keynes and who won the debate by a de facto rejection of both of them, had found fault with the fact that Hayek scotched the meme of a self-adjusting economy by ignoring it with an hypothetical lag owing to malinvestment that Hicks held was unrealistic. The Hicks version of Keynes, adopted by all the textbooks, had the meme that Keynes was out to dump at its heart viz. equilibrium. The equilibrium so obvious to Hicks that he never seems to have realised that Keynes was out to reject it, was, of course, just an account of self-adjustment by the market.

All this is lost on John Gray. It was enough for him that Keynes rather than Hayek or Hicks was the nominal victor. Gray has most likely not read Keynes’ 1936 book anyway. More oddly, it would seem that Hicks never did either.

Hayek was rejected as an economist after leaving the LSE [owing to irrelevant personal reasons, rather than to economics] as a result. At Chicago, he was allowed in only as a moral philosopher. A version of Keynesianism had won, Hicks version, but it was not anywhere near what Keynes had wanted. He wanted to reject market adjustment but Hicks largely retained that. Keynes had wanted it to be the rule that the market did not clear, as had Malthus tries to defend against Ricardo in the first decade of the nineteenth century but Hicks innovated a version that suggested that Keynes should have called his book The Special or Particular Theory rather than his actual title of The General Theory of Employment, Interest and Money (1936).

I see no sign that Hayek ever believed that he had lost a debate, intellectually, to either Keynes or to Hicks. Hayek saw the LSE go over to what was called Keynesianism, of course.

Hayek did go somewhat statist owing to emotional pressure, I suppose, but not ever did he become Hicksian or, still less, Keynesian. Keynes truly remained out on a limb as regards his hated equilibrium, that remained as strong as ever, even if a version of Keynes was adopted, and what was called Keynesianism was granted lots of rather incoherent lip service based on supposed rejection of the still largely unknown Say’s Law. Indeed, Keynes caricature of that was accepted completely by the 1950s.

But Hayek did recommend a safety net and it was the state’s safety net that alone caused the mass unemployment of the 1930s, not the supposed lag that malinvestment caused that somehow suspended Keynes hated equilibrium, as Hayek had held. The unemployed adjusted to the dole rather than to the market. We might say they joined the sinecure section of the state sector, only they did not, as in the late USSR, pretend to work. Indeed, the few who took a black market job pretended they were not working.

Hayek took the economic calculation argument [eca] from Mises but later found it in a few nineteenth century authors like Baggage, so Hayek made no pretensions to being “most original” in the knowledge finding function of the price system, as Gray has it. But Gray knows the eca, if not all its implications. However, he nevertheless is still silly enough to say it also applies to the free market.

Gray incoherently says:

“The trouble is that it also applies to unfettered market capitalism. No doubt markets transmit information in the way that Hayek claimed. But what reason is there to believe that – unlike any other social institution – they have a built-in capacity to correct their mistakes?”

The eca applies to unfettered market, says Gray, yet they do find viable prices as Hayek said too. That is “no” yet also “yes” too; or P&-P too. Gray is being quite absurd here.

Gray then asks how can the market self-adjust, unlike any other institution [is there a tacit “except the state” assumption there?] overlooking that the answer is by the ever adjusting price system. The market is dynamic as it is always adjusting by the price system.

History itself supports no supposition or thesis.

Panic obfuscates prices? How? Gray has adopted mere bluff from backward Keynes. There never was any irrational exuberance but there has been exuberance but it has not stopped the market from clearing. Why should it?

Yet Gray is content to say, to the backward readers of The New Statesman, founded by backward Keynes himself, that:

“History hardly supports the supposition. Moods of irrational exuberance and panic can, and often do, swamp the price-discovery functions of markets.

When considering how to overcome the Great Depression, Hayek opposed Keynes-style fiscal stimulus for the same reason he opposed monetary expansion of the sort later advocated by his friend the American economist Milton Friedman (1912-2006). In attempting to generate recovery by macroeconomic engineering, both monetarism and Keynesianism required a knowledge of the economy that no one could possess. Unlike monetarism – with which it has sometimes been confused – the Austrian school of economics that Hayek promoted insists that the quantity of money cannot be measured precisely, and that expanding the money supply cannot reflate the economy in a sustainable way.”

Friedman did adopt aspects of Keynes, as did Hicks, but they did not reject what Keynes detested: equilibrium. Gray continues:

“For Hayek, the causes of the Depression lay in earlier central bank policies of cheap money, which resulted in large-scale misallocation of capital. Because no central authority could grasp the shifting pattern of relative scarcities and prices, only the market could determine the right allocation. Accordingly, believing that misguided investments had to be liquidated, Hayek argued in the 1930s for policies that were more contractionary than those that were actually pursued. The task of government was to get out of the way and let the process of adjustment run its course.”

Quite, Hayek was right there but he thought a lag might be created but he erred there as the market is a non-stop process of adjustment; Gray says it yet he also wants to deny it too; again P&-P too.

Gray seems to see how the market adjusts but he still perversely wants, or he writes as if he wants, the state to stop it. Then he, rather stupidly, denies that the market even can adjust.

But he continues:

“If they had been adopted while the crash was under way, Hayek’s prescriptions would have made the Depression even worse than it proved to be – a fact he later admitted.”

He did not admit anything like that, which I can recall. New buyers would have come in and the readjustment would have been fairly rapid.

If Hayek thought the depression would have been worse, if not for the state, why did not Keynes win him over? Anyway, it seems that the state prevents rather than aids market readjustment and that stagnation is alien to it. As Gray says of Hayek:

“But he never accepted Keynes’s core insight that large-scale economic discoordination could be the result of the workings of the market itself. For him it was always government intervention that accounted for market disequilibrium. More sceptical as well as more radical in his turn of mind, Keynes questioned the self-regulating powers of the market. His work on the theory of probability disclosed insuperable gaps in our knowledge of the future; all investment was a gamble, and markets could not be relied on to allocate capital rightly.”

Questioning the market is fine but the price system is clear enough there as a self-adjustment process to fresh conditions, so any serious questioning might have led Keynes to realise that. It might also lead Gray to do so too. He continues:

“There were booms and busts long before the emergence of modern central banking. Left to its own devices, the free market can easily end up in a dead end like that of the 1930s.”

No, the market does not stagnate. The dole was needed for mass unemployment to muster in the mass urban economy, and it is true that Hayek did go statist enough to agree that the masses would need a safety net, the very thing that stops the market from clearing. Freedom or liberty means we all need to be responsible and for us all to have savings, that Keynes repeatedly made a very poor case against, for some savings are vital to tolerate the intrinsic self-adjustment of the market.

But Gray feels that Keynes knew more about markets than did Hayek, as Keynes was a practical and successful investor for his college. Indeed, he claims that Keynes was one of the most successful investors in the twentieth century! So he knew about the uncertainty of markets in a way that Hayek did not, says Gray. He was aware of how the misguided economic policies might upset society in a way that Hayek did not, for Hayek ignored all those hazards. Here Gray seems to have lapsed into imagining that it is Hayek advocating state control by political policy rather than Keynes.

Gray says that Hayek’s blindness on politics was all too clear when he advised Margaret Thatcher to cut the state sector, that Gray calls public services, and to cut inflation so that the state budget might be balanced. This was exactly as he had advised in the 1930s, says Gray. He told Gray, in private conversation, that Trade Union power might be broken if the state made cuts. Gray thought Hayek was indifferent to mass unemployment that then, in the 1980s, stood at over three million. Gray does not realise that cuts might get rid of mass unemployment, as he never seems to have seriously thought much about such problems. Instead, Gray said that cuts would increase unemployment. But it is only the dole, paid for by the state from taxation, which can do that.

Gray says:

“Fortunately Hayek never had any influence on Thatcher’s policies. (Her chief economic adviser in these years was Alan Walters, a Friedman-style monetarist.) Equally, and perhaps also happily, Thatcher had no understanding of Hayek’s ideas.”

Gray says she haply never read the stint at the end of The Constitution of Liberty (1960), where Hayek explains “Why I am not a Conservative” for he rejects because conservativism rejects progress, says Gray. “Unlike Hayek, Thatcher understood and accepted the political limits of market economics” Gray says, but Gray and Margaret Thatcher never saw how damaging the state was to society. The main fault with Hayek is that he too had too much tolerance for backward politics. Politics is perverse wastage that needs rolling back, or cutting out completely, by tax cuts and privatisation.

Liberalism went out of fashion around 1860 but Gray imagines it actually collapsed, a very Romantic idea that is utterly unrealistic, given the nature of civil society. War would not have set liberalism back so much had liberalism remained the fashion, but socialism/collectivism was, by then, the fashion. War did end the empire that Hayek grew up in but nor was that particularly liberal in itself: no empire ever, quite, can be. Civil society, that is the basis of liberty, is not one whit fragile and it is very stupid indeed to imagine that it is fragile. No wonder they called the Tory Party “the stupid party”. This idea that society is fragile is about as unrealistic as one can get about civil society. But Gray simply does not see the pounding the backward state hands over to society every single day, thus showing it to be very durable.

But Gray is right that Hayek badly over-rated the law. It never could be the basis of civil society as so many, with Hayek, imagine. Like the state itself, law is at the periphery of society. Nor can it really protect liberty from the state. Gray is right there. Indeed, statutory law is a tool of despotism and privilege. Liberalism is about repealing illiberal laws rather than establishing new statutory laws.

But liberal values, if fostered amongst the public, can see off war. Private property is a problem solver. The state, by contrast, is a trouble maker. So the less we have of the state, the better.

Why Gray imagines the political entity of the Austro-Hungarian Empire kept politics at bay is not one iota clear. Gray is right that the European Union is not going to aid liberalism as it is a warmongering pact, despite the pretense it has of being for peace. The EU is out to be top dog superstate, but it is taking its time. It is almost as slow as the progress towards full liberalism itself. But all societies, even the backward late USSR, had the liberal civil society in their practical everyday life. In any society most members respect the liberty of others. But also all allow the state to scotch liberty at will; that privilege granted to the backward wasteful state by the people is the main problem. They give up this liberty to form state privilege by suspending normal moral values in its favour. As Edmund Burke said: “The people never give up their liberties but under some delusion.” The delusion here is that the state is a boon. Even John Locke thought so.

Gray fails to reproduce Popper’s attack on Hayek and Michael Oakeshott saying that Hayek’s spontaneous order as “rubbish” is no explanation of its faults whatsoever but Gray says it is exact!

However, Gray witnesses civil society every day in which strangers in the mass urban society freely pass him in the street, which is done as part of what Hayek would say is a spontaneous order. My guess is that Gray has no case against civil society; nor any good case against liberalism.

The change of fashion away from liberalism towards socialism after 1860 seems to have been flimsy, though it was aided by some haziness amongst the liberals as well as some youthful charismatic dash as well as sheer ignorance amongst the rising statist liberals, like Joseph Chamberlain and Charles Dilke in the UK’s Liberal Party. The pristine liberals were aging and pragmatic anyway. That there was a generational difference greatly aided the change of fashion. Gray makes the quip that there is nothing liberal about the mafia, and that is quite right but that is also true of the state too, but despite Chamberlain’s talk of public service it was more like rule than service that the new man management and more state control of the new fashion was to embrace.

Gray has the idea that a mafia would arise spontaneously, even though he also wants to be sceptical about that meme from Hayek, to say it was exactly rubbish in fact. . However, the culture developed over a long process of real full privatisation, designed to shed government and all government policy rather than as a mere new way to further state policy by political use of the market, as that called privatisation has been since the 1980s, would result in security services that would have had lots of time to crowd out the mafia problem.

Herbert Spencer was right that there was a social movement towards liberalism before 1860 but he also saw the fashion change towards socialism later on too. He argued against socialism. But he ironically had a holistic meme that the socialists used to even a greater extent than they used Marx. Just look at almost any Jack London novel to see a socialist in love with Spencer. William Hurrell Mallock saw such faults in Spencer, who later admitted to Mallock that he was too collectivist, though he never met Mallock. But pristine liberalism lost out to the new fashion of statist liberalism; and to socialism generally. It revived a bit in the 1970s when Gray joined it. But Gray always did love pessimism.

Gray simply errs left right and centre in his rather silly ideas about alternative economic systems and choice. The USSR never was non-capitalist, for example. An increase of the state ownership is not an alternative economic system but the enlargement of a sort of quasi-dole or semi-dole; the rise of where, in the late USSR, they said the workers in the state sector pretended to work and the state pretended to pay them. Many thought that in the UK this was “mixed economy” but in reality it was just an over-taxed market economy that supplied some job security. The mixed economy is a mixed up idea. There is only the market economy. The state sector just means higher taxation.

Communism is a myth, not a real rival to the price system, and the late USSR did not even claim to be communist but rather it claimed to be socialist, that Lenin said, a few times, was state capitalism. It would be clearer to just call it capitalism. But it was anti-liberal. Gorbachev tried to reform it but Yeltsin got rid of it. No collapse in sight.

The idea that the Afghan war brought it down is an example of Gray’s inability to judge actual events. There is no choice of economic systems. It is either capitalism or capitalism. But we can always have a bit more of the wasteful state.

Of course, Hayek and Spencer had a lot in common as Gray said. They were both liberals.

Again, China was capitalist, if statist too, under Mao. Deng Xiaoping simply freed it up a bit. Pristine liberalism will free it up yet more.

Letting the banks go under would not have been all that bad from liberal point of view. The fresh banks that would have emerged to replace them would have most likely be in better shape today had the state allowed that to happen back in 2007, as Hayek might well have recommended.

Hayek erred on the fairness of the market. He thought it was wise to say it is unfair, but few people in the larger society have ever thought that. Most people think it is fair enough, but no end of fools in colleges think they know better; so do schoolteachers but not most students in the colleges or most pupils in the schools, even though they may be usually a silent majority. Hayek thought that the idea that the market was unfair had something to it, but it looks to be merely a perverse idea.

Gray, for all his silly cynicism and pessimism still has not realised how unpopular the college/mass media sacred cow or ideal of democracy has always been, and always will be. The “anarchic energies of global markets” clearly serve the public way better than democracy ever will.

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Lots of PC controvery

Current AffairsPosted by David McDonagh Mon, June 22, 2015 18:04:47

A weekend of Politically Correct [PC] controversy

What PC controversy the weekend of the third week of June 2015.

We have the continuing reaction of some scientists to the PC anti-sexism against Tim Hunt, for they seem to be attempting to have tolerance instead of strict Politically Correct [PC] equality rules in science, the pro-PC report in the top science journal, Science, on no hiatus in global warming, as they say that, all along the eighteen or so years, there has been a lot of error in the way the data was collected, and this report is just in time to aid the new Green campaign of the current Pope.

Then we have the asking of whether Rachel Dolezal has the right to call herself black, then, later in the week, the very odd question of whether the terrorist who shot the nine people in a church in an attempt to start a race hate war in Charleston USA was truly a terrorist, or not.

Then there is the BBC licence fee coming up for the “left” leaning BBC, though the free access, or price free, London Evening Standard makes it look moderate, but then it could be catering to London, where the Labourites actually won in last May’s General Election, together with the supposed voices appearing in the head of Jeremy Clarkson on being offered his job back, though the BBC aired advertisements all week for his due grand new series, despite its claims never to ever advertise. Tony Hall, the Chief Executive Officer or Director General of the BBC said on Sunday, 21 June 2015 on The Andrew Marr Show that he had not changed his mind since he regretfully parted with Clarkson, but he confessed that he did not know that others might have reopened the offer, and he said nothing about those advertisements, or programme trailers, nor did Marr.

David Cameron’s speech on extremism, that Muslims feel is the position of The Daily Mail but against them, the week-long repeated media of press articles, TV and radio programmes enquiry as to why so many Muslims liked jihad, and why they often liked ISIS too.

Thousands were said to be marching in London, against what they call “austerity”, where Jeremy Corbyn MP, the new star, or so some Labour MPs imagine, says he is due to tell them that austerity obfuscates inequality. Corbyn is said by many to have emerged as a star in the staged Labour Leadership campaign that began earlier this week at Nuneaton, shown on BBC2 at 7pm on Wednesday 17 June and discussed at 10:30pm and in the press the next day. It was the first of many meetings in constituencies that Labour needed and were expected to win in May 2015. On Saturday, the meeting was held in Stevenage, where the Tories increased their share of the vote instead of falling to Labour. At the first meeting, all the reporters credited Liz Kendall as replying to Andy Burnham, who had said that the Party matters most of all, that the country mattered far more than the party. But most of the applause was for Jeremy Corbyn at that, and also at subsequent meetings, like that of the following Saturday in Stevenage, so he has, now, emerged as a star, with younger Labour MPs thinking he might even be the next leader and saying so on The Sunday Politics, such as Clive Lewis, as well as older ones like Diane Abbott.

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Is this the end of the Labour Party?

Current AffairsPosted by David McDonagh Fri, May 15, 2015 21:12:24

Are the prospects of the Labour Party to ever rule again now dead?

In Spike, Mick Hume says the election destroyed Labour! Hyperbole? Yes, for it still is the second largest party in the House of Commons. But can it ever win power again? The loss of Scotland makes this question way more pertinent than at any time in the Labour Party’s history. It now looks as if Labour has locked itself out of Scotland and if that is the case then it truly might mean that Labour never wins a UK election again.

It is the way that Labour got thrown out of Scotland that makes a comeback difficult. But in any case, as so many others have said, Scotland was encouraged by Labour in the past to go in for an unrealistic amount of welfare, as Greece did in milking Germany but it was to a much lesser extent milking England by the Barnet formula, that Joel Barnet himself has repudiated, but the SNP under a clear pretence of independence, held the EU gave it Germany as a much better cow to milk if ever it got free of England. But the Greeks, who, despite the wonderful Scottish Enlightenment, courted a fondness in Germany with a far greater cultural heritage of 2500 years back, nevertheless Greece queered the pitch with the Germans not only for themselves but for the Scotch too, in the future, for they ensured the Germans were bitten hard enough to make them more than merely twice shy. But the SNP tend to overlook that.

Walter Bagehot in The English Constitution (1867) held that the largely tacit, or unwritten, constitution had its ornamental and functional parts. There are two sorts of politics, ideological and practical. The major parties are largely concerned to be practical, but ideology itself has some practical or functional parts. If we go back to the UK of the 1960s and 1970s, the two major parties had their ideologues as well as their parties, the Labour Party had Tony Benn as an ideologue as well as a practical Minister for Technology where and when he took advice from the civil servants of the time, that had little bearing on his ideological aspect, though it would need to be roughly compatible with it, if both were to flourish.

Dr Johnson set out to gauge the difference between the Whigs and the Tories in the eighteenth century whilst Sir Robert Walpole was, what historians today agree was the first Prime Minister, up to 1742. When others took over, Dr Johnson was rather surprised that they adopted many of the same positions, apart from opposition to war, as Walpole had taken. There was then, as since, a practical continuity between supposedly distinct ideological administrations that tended to share the same experts in the civil service that may not have been somewhat immune to fashion or to ideology as they were supposed to be, but whom certainly saw themselves as mainly practical or functional. Ideology or fashion was, for the most part, if ever quite completely, ornamental rather than functional.

So we might see that quite a bit of this ideological clash that usually takes place between the two major parties, if not all of it, is ornamental rather than functional. However, it can become rather unrealistically tribal with some politicians and it has tended to do so with the Labourites a bit more than with the Tories. In Scotland it emerged that the Labourites demonised the Tories quite successfully, especially after the rise of Mrs Thatcher, whom many in Scotland detested. They successfully ran the Tories out of Scotland by such demonization. But when Blair, later, adopted many of the Tories policies, as so many parties do in the UK’s two party system, this allowed the SNP to say that the Labourites were quasi-Tories, so they were as bad as they themselves had earlier said that the Tories were. This allowed them to see off the Labourites on their own anti-Tory demonization culture. But it is not going to be an easy culture for future Labourites to counter, as the SNP have no need to adopt any earlier policy changes from the Tories. So it looks like Labour have lost Scotland and that some new opposition might rise there against the SNP rather than ever again either Labour or the Tories. Will Scottish Labour do it? It failed to do so this time, and it might never do it. It does not look easy. It is not impossible but nor is it an ordinary setback.

The Economist holds that the Labourites have a threefold task against the SNP in Scotland, the UKIP in the north of England and the Tories in the south [Friday, 15 May 2015 (p30)] but though the three clash the real problem is in Scotland with SNP. Labour has never won without Scotland before and maybe they cannot do it.

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Privilege and under-privilege

Current AffairsPosted by David McDonagh Wed, April 08, 2015 17:42:29

It is the state that is illiberal and the state is the sole source of privilege and, thereby, of under-privilege too.

Statist Political Correctness [PC; the ideologues who push it are PCers] is maybe the chief ideology against liberty today as it is for totalitarian government and for general intolerance. However, if the said current totalitarian ideologues, the PCers, ever gave up their use of the state for protection of their pet groups, if they never sought to privilege them in law and so thereby under-privilege everyone else, then PC would be reduced to mere free speech. Mere mores may set up quasi-privilege but it is the law and actual privilege that is illiberal. So without the use of the state and the law, PC would be not one whit illiberal.

Similarly with the various religions, they are free only, if they are not protected by the state, or if they do not go into politics to dominate others then they will not be against the social liberty of all others, but if ever they do resort to the state then they will be against social liberty.

This is because active politics never can quite be neutral. It always abuses others by using gratuitous coercion against them. As it is today, free speech is the about main thing the PC ideologues want to outlaw. Oddly, they often say they stand for free speech but then they clearly contradict themselves by explicitly listing a long list of exceptions.

The Economist, 28 March 2015, (p35) carried an article on “The right to be rude” on religion and free speech.

This magazine that calls itself a newspaper is mainly concerned nowadays with crass politics, but it began as a liberal journal backing up the Anti-Corn Law League, the great nineteenth century propaganda and pressure group for free trade, that was soon led by Richard Cobden and John Bright. This pressure group aided the Corn Laws to get repealed in 1846 and then it disbanded but the journal continued, largely on economics in those days but since 1945 it seems, at least to this reader of it, to be way keener on politics and it might be clearer if it changed its name to The Politician.

It reports that an “offensive preacher” has acquired some unlikely allies. A Christian street propagandist, Michael Overd, 47, had repeatedly told two male homosexuals displaying their affection in public that they were sinners who would burn in hell. He also said that Islam was sinful in the main High Street of Taunton, Somerset.

Michael Overd had repeatedly told Craig Manning and Craig Nichol that they would burn in hell on seeing them boldly walk around hand in hand on the main High Street where Overd regularly went to peach to all and sundry. They took offence at this, but they nevertheless seemed to repeatedly return to the High Street to get more readings from the Bible on how very sinful they were from Overd.

The BBC news reported from what looks like an earlier court appearance by Overd, and his two “victims”. The case seems to have been in court a number of times, two times or even more, before the session that The Economist reported in March. The BBC on-line news site reports that in his earlier evidence for the court against Overd, Craig Nichols said:

“He said 'I have already told these two sinners over here that they are going to burn in hell'.

He looked at us and pointed at us when he said it. His voice was quite loud and very clear.

I felt angry, embarrassed and ashamed. It was a really busy day and I felt that everyone was looking at us when he was saying these things to us.

I asked him who he was to judge me and he said 'It's God's words, it is in the Bible'. He said I should repent and ask God for forgiveness.”

A Muslim judge, Shamim Qureshi, ordered Overd to pay damages for using threatening and abusive language from the Bible of £250 but the more serious charge of a religiously aggravated offence was rejected. When Overd protested at paying a sodomite such a sum the judge threated him with 45 days in prison otherwise.

Afterwards Overd said: “ If I heard someone preaching the things I am accused of preaching I would talk to them about it.” But, as George Bernard Shaw rightly said, the golden rule of doing onto others exactly as we would have them do onto us can, often, fail to show other people proper personal consideration, as a boxer might have a different idea of that from hairdresser thus either might have starkly inept rules. What is fine for an enthusiastic propagandist, like Overd, need not be apt for Nichols, or vice versa, but, given that the High Street in Taunton normally allows public speaking by tradition then Nichols seems to have had plenty of space to dodge ever being offended by Overd. On the face of it, it seems to have been silly of Nichols to take offence, let alone to repeatedly go back for more. Those who do take offence all too often, thereby, seem to earn it.

Peter Tatchell, a well-known gay-rights propagandist has offered to speak in favour of free speech in court for Overd. He does not agree with the Bible on gay-rights but he feels it should be tolerated as part of traditional civil liberty and free speech. Being spared offence is not a human right. To criminalise traditional religion is a step too far, he says.

What seems yet even more unacceptable to many organisations concerned with civil liberties and free speech is the Politically Correct courts and current totalitarian PC law in the UK. The National Secular Society [NSS] seems to hold that free speech is in danger, and they too have aided Overd in support of the general cause of free speech as a result. They say the PC legislation is too sloppy. Overd was prosecuted under the Public Order Act and it can lead to up to seven years in gaol if the threatening, insulting or abusive language that the law outlaws is deemed to be racially or religiously motivated.

The NSS, and other civil liberty groups, have recently got the law amended such that it is not only up to the police to judge if what is said potentially offensive. It needs, now, to be shown that the language was aimed at a particular person or group and that offence was taken by the targeted person or group. But many want further reform of the law to remove the privilege that religion still has in law, despite the abolition of the common law against blasphemy since 8 March 2008. They hold that the idea of religious aggravation revives this abolished blasphemy law to protect religion from criticism, according to the executive director of the NSS: Keith Porteous Wood.

Prior to this abolition, the law had long been allowed to fall into abeyance, or neglect, until Mrs Mary Whitehouse attempted to revive it in the 1970s, actually being successful in 1977; in the case of Whitehouse versus Lemon.

During the Rushdie affair, many Muslims sought also to revive the blasphemy laws, so that they could be used to imprison Salmon Rushdie, and any others who might write similar books to his Satanic Verses (1988), that seemed to them to set out to deliberately mock Islam.

But they overlooked, in this entire rumpus that the Rushdie affair gave rise to, that the British common law blasphemy laws were quite indifferent to Rushdie’s books but not at all to the Koran, that did indeed flout them in the way it basically rejects the Christian creed. So the Muslims, ironically, sought to revive a law that would effectively outlaw their own religion rather than protect it. When some of them realised that, they sought to change the old common law so it would protect Islam as well as Christianity.

On 5 March 2008, an amendment was passed to the Criminal Justice and Immigration Act 2008 which abolished the common law offences of blasphemy and blasphemous libel in England and Wales. The Act received royal assent on 8 May 2008, and the relevant section came into force on 8 July 2008. It was haply thought by the establishment that it would be better to abolish this law altogether rather than to too openly privilege Islam in the UK. The resulting need of the natives to kow-tow to Islam might have been too clearly an under-privilege to impose on the population, even for the increasingly eager UK totalitarian establishment of today.

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Ukrainian Resolution

Current AffairsPosted by Stephen Berry Sat, February 21, 2015 10:51:49

NATO has received a well-deserved trouncing in the Ukraine and the coup d'état organised to overthrow the democratically elected government of President Yanukovich has spectacularly backfired. This result is in line with other recent examples of Western foreign policy in the Middle East, so we can detect a certain continuity here. The wish to bring Ukraine into NATO must now be put on hold.

When the residents of the Donbass region rose in revolt because their Ukrainian government had been overthrown by force, the leaders of the Kiev putsch decided to continue the use force and brutally crush them. Thus we saw a stand-off between Kiev backed by the West and the Donbass rebels back by Russia. Why has this turned out to be such a fiasco for the West? Two main reasons can be detected.

First, NATO’s tried and tested method of gentle persuasion, the bombing campaign, could scarcely be employed in the Ukraine. What had been used with such alacrity in Serbia, Afghanistan, Iraq, Libya and Syria could scarcely be ventured against Russia. True, Russia can be bombed, but it was also possible for Russia to bomb back. Russia is not a militarily ineffectual Third World country and in Putin, NATO must have known they were dealing with a man who could not be trifled with. Hence the hysterical fist waving in the Western media whenever Putin’s name is mentioned.

But the second reason is, in my opinion, the more important and interesting. There are a number of countries in the EU who want and benefit from good relations with Russia and do not share the present US obsession with weakening Russia at every opportunity. The most prominent of these is Germany which is Russia’s most significant trading partner. I doubt whether Merkel was consulted on the policy to destabilise the Ukrainian government. Certainly, she must be hopping mad as to how the Ukrainian stand-off has so badly damaged Russo-German relations. It’s clear she wanted the Ukrainian problem fixed and German differences with the US on this matter are not just ‘tactical’ as Obama recently fondly maintained. US and EU interests do not always coincide and the Ukraine crisis acts as a big red flag to both parties.

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BBC radio on Democracy day.

Current AffairsPosted by David McDonagh Tue, January 27, 2015 14:52:49

At the House of Commons with Democracy Day due 20 January, the BBC yesterday got the moral and political philosopher, Professor Michael Sandel, to spur an audience to apply some critical thinking to democracy that was broadcast at 8:30am on Tuesday 20 January 2015. Michael Sandel presented this special BBC Democracy Day edition of The Public Philosopher, recorded in the Palace of Westminster with an audience of MPs, peers and the public the day before.

Sandel lead on a few issues, beginning with J.S. Mill’s rather futile idea of giving many votes to the educated, as if even a hundred votes could have anything like a hundred times the affect, or even any effect at all of note, on the result in a very large electorate.

Few people want to think about democracy. 1) The audience wanted, on principle, an equal vote, so there was a mass rejection of Mill on more votes for the educated. Each vote should count the same. Yet the consistency arrangement tended to rule that out. Many, as thoughtless as Mill, thought that some system of PR might rescue the affect that a vote might but clearly a vote or many votes in a large electorate is bound to be insignificant. This seemed not to be noticed at Westminster. 2) They also wanted accountability to the public, as if that could be had in Representative Democracy [or in Delegative Democracy either] where the experts make up long diverse manifestos that few can find time to read and where any single issue, or topic, is basically well obfuscated. It might as well not be there. 3) They wanted to do what is right [suggested by Sandel to be what is Politically Correct {PC} but soon adopted by the audience of MPs and others as obvious too] even if against the majority [they do not even notice that this PC meme is not one whit democratic, but rather sees it as a duty to go against it on capital punishment; and indeed on any PC issue, if ever it is rejected by a majority] so they reject referenda too, as it will not do the right thing i.e. be PC. They all like the PC privileges on race and sex.

Students do not like to be blamed for not registering to vote. Blame itself is nasty and against PC. PC is against judgement. Indeed, they were all far more PC than democratic. So when democracy clashes with PC it is held to be wrong but they still want to say they are not ruling in favour of PC as they feel PC is part of democracy in a way.

They conflate the two but not only does democracy clash with PC, but with liberty too. But as democracy is always an attempt at proactive coercion against others, so it is always somewhat illiberal. It is intrinsically against liberty but, again, the audience conflated democracy with liberty too; as do many in the mass media and even in political philosophy departments in the colleges.

Many in the audience held to Mill’s idea that voters needed to be educated, even if they rejected his more-vote solution. They hinted at a solution of being paid to spend time finding out instead, and many of the audience suggested special days off to be educated before each pending General Election, an getting paid for educating themselves about it from general taxation.

Some MPs feel that marginal seats are tails that wag the dog in claiming all the attention of all the political parties and that some form of PR might solve that imbalance, they said.

Democracy can be used by liberals to negate the negation, to vote for rolling back the state or for full privatisation and that is like reactive or defensive voting rather than a proactive attack on others.

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George Orwell

Current AffairsPosted by David McDonagh Tue, September 02, 2014 20:53:27

I criticise the above below. But immediately below is a link to a talk that David Ramsay Steele recently gave on Orwell.

His book on Orwell might well be out soon.

How mediocre was George Orwell?

George Orwell was no philosopher, or thinker, but rather he was a follower of Bertrand Russell. However, he was certainly a master of the English language. He might not have often been very informative, but even when he wrote on making a cup of tea, his prose was well worth reading, even if nothing much could be learnt from what he wrote.

Like so many others, it was all too easy for me to soon read all the main things he wrote in the 1960s. His surviving wife brought out his collected journalism in four volumes in 1969. All four have been widely read.

Daft Will Self picks on Orwell’s ideas of writing to criticise or to reject. This is certainly Orwell’s strong point. But in clear and readable writing Orwell has few rivals. This is why he continues to be read. Oddly, in this attack, Will Self confesses to being an avid reader of Orwell’s. He finds the books can be returned to again and again. How many others can he say that of? It does not occur to daft Self to ask why that is, if it is to be truthfully said to be mediocre. Presumably, it is because he finds the writing to be good, rather than mediocre. He even explicitly admits that he likes the style. But then the love of paradox leads daft Self to say that it is the good style that makes Orwell a mediocrity but the likes of Self rarely can see the difference between the sort of paradox that is logically valid but merely clashes with common sense only, that can be true, and the intrinsically absurd such as he employs here in saying readable prose is a sign of mediocrity. It is plainly a sign of excellence. The plain fact is that Orwell was an excellent writer. Hence his success as a writer.

Self confounds his folly further by saying that Orwell had a particular genius in his prose style that had almost hypnotic virtues of clarity that suggests to the reader that he alone comprehends what is being said. How mediocre is that?

Self seems to think the word “ideology” can do a lot of work in getting over his rather absurd message. He accuses Orwell of being an ideologue but the accusation is nebulous in the way it is used of late, as it seems to refer to no more than some sort of outlook, or other. Don’t we all have an outlook of some sort? Why bother saying it of Orwell [or of anyone else] then?

Self uses another intrinsic paradox to end with viz. whenever we tell a truth we thereby obfuscate other truths; but this, again, is yet another absurdity. A truth that should obscure nothing is that Self is clearly a bit on the thick side.

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