Responding to the riots

We’re in the third day of riots now, with few predicting that they will end anytime soon. Even cities that haven’t experienced them yet are preparing for them. On an anecdotal level, the presence of police cars and vans in Cardiff today is particularly noticeable.

That said, three days in, we still have very little understanding of their true cause. Our ignorance however is not matched by commentators. Prominent left-wingers such as Ken Livingstone are claiming they are caused by the cuts; others, like Darcus Howe, are claiming they are caused by anti-black racism. On the right, Damian Thompson blames social networking, (which in turn somehow means that UK Uncut are morally culpable), whereas Christine Odone puts the blame solely on single parent families. Brendan O'Neill knows that everybody else is wrong and blames the welfare state. Other causes espoused are muslims (somehow), as well as the lack of ice-ages in sub-saharan Africa (no, really).

We can't say how much this is caused by political issues (if at all), how much of this caused by general sociological trend or trends (and if so, which), how much is the product of local issues, how much is the result of very recent events, how much of it is maximised by media coverage (and what type) or how much it is simply criminal looting.

In short, we simply don’t know.

About the only thing we can be certain is that it is highly unlikely to be caused by One Big Thing. Declarations to the contrary – which are frequently couched in visionary-victimhood terms ‘but the establishment will strike down anyone [i.e. them] who’s brave enough to admit the truth’ – are not only baseless, but tell us nothing other than what their political agendas and prejudices are.

These riots – and our knowledge is so lacking, that it’s far from certain that that’s the correct term for them – will surely end. They will end by a mixture of sensible, effective responses by police and especially the public – the latter of which is hearteningly coming out in real force and numbers. The powers that the police have are perfectly sufficient, as the numbers of police available. After all, 5000 police officers were on hand for the Royal Wedding.

Demands to bring in the army are ludicrous, as David Allen Green pointed out. There are no grounds for thinking that they will be better informed or better trained to deal with social disturbances in urban Britain compared to the police, and far more grounds for thinking that the reverse is true.

Demands to bring more violent and martial responses, and to return to a more fear-based relationship between the police and the public,  (which is what one former Lib Dem candidate from rural Wales called for today) are also badly informed. It's not as if there were no riots in the eighties, seventies, sixties or fifties. These demands become particularly bizarre when justified on the grounds that they’re used in Northern Ireland – as if that is the sort of community-police model we wish to replicate.

Knee-jerk reactions, claiming certainty when there is ignorance, won’t help us. Let the police do their job, let the public come out in social solidarity against the rioters, and once this wave is over, let’s try to understand it properly.

In all probability, the causes won’t fit neatly into an exclusively Left/Right or traditional/modern framework, nor will the solutions to prevent such riots in future.

But whatever we lose in certainty and neatness, we will surely gain in clarity, accuracy and effectiveness.

'Political Correctness Gone Mad' - gone mad

 Last week, the editor of Spiked Magazine and Telegraph contributor Brendan O’Neill gave a speech on the tyranny of political correctness, subsequently published on Spiked here.

The title and conclusion of the piece seems to be that political correctness is not something enforced by the elites but something internal. However, this thesis doesn’t last very long, as argues that ‘the new elites clamp down on and closely govern what were previously considered to be normal interactions’.

This swivelling confusion aside, O’Neill argued that the rise of PC is down to the ‘internal moral rot amongst more traditional sections of society’, highlighting how 15 years ago the Girl Guides (apparently ‘suddenly’) rewrote their constitution. Girl Guides no longer promised to respect their ‘duty to God’, but instead to ‘love my God’ and the oath of loyalty to the Queen was removed. Changes caused because ‘in our relativistic times, when both Truth and Christianity are no longer untarnished values, there are many gods’.

For those who don’t know O’Neill, or Spiked, it might be worth pointing out here that he and his magazine are passionate republicans, and the general ‘shtick’ of the magazine is to oppose the prevailing consensus, or as Nick Cohen put it, ‘the willingness to fill space and generate controversy by saying the opposite of what everyone else is saying just because everyone else is saying it – an affectation most people get over around puberty.’

Even if you don’t agree with Cohen criticism, to lament the loss of monarchism and homogenous thought which being contrarian republicans is gloriously inconsistent. Later on, O’Neill does concede that this weakening ‘did not have to be a bad thing’, provided that it was replaced by a ‘more progressive, human-centred moral outlook’. Quite what this outlook should be is unsaid, but I’m guessing it’s the type of agenda that Spike’s advocates. It's fair enough to call for such an agenda, but to complain about the tyranny of PC because the Girl Guides added the word ‘my’ fifteen years ago, whilst then calling for the Girl Guides to reground itself on entirely new philosophy amenable to the good people of spiked magazine is chutzpah indeed.

Given the scale of PC tyranny that worries O’Neill however, it’s worth looking at the specific examples he cites as to its domination.

He highlights how teachers are no longer allowed to use the word blackboard; a five second Google search however, would show that this ‘story’ was nothing but a media fabrication.

He refers to a case of ‘a book of children’s ditties refashioned the old classic ‘What shall we do with the drunken sailor?’, replacing ‘drunken sailor’ with ‘grumpy pirate’. The old song said ‘Stick him in a bag and beat him senseless’; the new one says ‘Tickle him till he starts to giggle’. O’Neill rhetorically askes, ‘What kind of society takes such an Orwellian, Ministry of Truth approach?. What indeed.

Again, a five second google search would have taken him to a BBC article where the authors explicitly state that the changes had "absolutely nothing to do with political correctness." Furthermore, "the shift from drunken sailor to "grumpy pirate" was to make the rhyme fit a pirate theme, rather than censorship” and that "The inclusion of action lyrics like 'wiggle' and 'tickle' offer parents and small children an opportunity to interact, have fun and enjoy acting out the rhyme together."

The worst excesses of PC tyranny therefore is the Girl Guides introducing the word ‘my’ into a sentence fifteen years ago, and two claims which are demonstrably bogus. When people have to base their arguments on such flimsy  grounds, it’s no wonder that they eventually collapse

Most articles of the ‘political correctness gone mad’ type are based on entirely distorted or just simply fabricated, and O'Neill follows in that dishonorable tradition. PC critics frequently cry out that nowadays ‘you can’t say this, you can’t say that’. In truth, they’re perfectly free to say whatever they like (obtuse libel laws aside). What infuriates them is the speech of others who criticise them for calling people faggots, pakis and niggers. They want the freedom to criticise without being criticised in turn. 

In fairness, O’Neill is close to being right on the point that PC is overwhelmingly internally generated rather than externally controlled (that is, when he doesn’t make the opposite point in the same piece), though this is caused more by an atmosphere – essentially media fabricated – that PC controls everything. It’s this that causes the few entirely ludicrous but actually true cases of ‘political correctness gone mad’ which appear in the media – almost none of which are caused by pressure ‘on high’. It’s this febrile atmosphere also which contributes towards some idiots becoming so enraged by political correctness as to take literally invocations such as O’Neill’s, to ‘pull your socks up and get your guns out.’

Contrary to their comforting delusions, criticising political correctness isn’t brave, dangerous or a sure path to social martyrdom. It’s routine, usually boorish, and so conventional that any myth can be invented in its name and it will be swallowed whole, to be endlessly regurgitated ad nauseum in the media and pseudo-critical web alike.

Plaid's economic report: Wales saved?

Plaid’s report claiming that Wales would be 40% richer if it were independent has received considerable coverage. Even the UK media’s picked up on it. It’s likely to be a base for the party’s belief in independent so it’s worth looking at it in detail.

The first thing to acknowledge is that the report isn’t really about Wales at all, at least not directly. The first 62 pages out of 70 merely make the case that smaller countries can be just as prosperous as larger ones. Essentially, what they lose from economies of scale and an extensive domestic market, they benefit from having closer relationship between state and business, and from that, greater nimbleness and responsiveness.

On the whole, it’s a largely convincing argument, though the need for near-autarky model of a corporatist state, rather than a more pure ‘free-market’ model relying on international capital should have been made more explicit. Ireland and Scotland used to be Plaid’s models. Their over-reliance on finance meant that Ireland (and Iceland) crashed harder than almost any country. Had Scotland been independent, the bailouts of Royal Bank of Scotland and HBOS would have buried its economy. This implicit mea culpa on Plaid’s behalf goes unacknowledged.

However, the headline story – and the political purpose of the report – that Wales would be much richer being independent is on far shakier ground.

Firstly, no mention is made of the fiscal subsidy that Wales has effectively received over the past generation (and more), whereby it’s received considerably more government spending than it’s contributed in tax. This gap remains extensive in relative terms even if you account for deficit expenditure.

The claim that Wales would be 40% richer is derived from higher growth from 1990. For it to be credible, it should subtract this subsidy from the running baseline from 1990 onwards. In other words, a credible ‘40% richer from independence’ claim would have to add this subsidy. It does not. I don’t know how much it is, though over the past 21 years, it could easily amount to an extra 20% on GDP – especially it you include the multiplier effect – and it could very well be more.

That this hasn’t been factored in, or at least acknowledged, is either exceptionally sloppy, or deliberately misleading.

Even if we accept their 40% figure however, the question then comes to how have they achieved it. Remember, most of the report makes the case that smallness has advantages that cancel out the disadvantages. Assuming this is credible, is there clear evidence that smallness is actually much more advantageous? Here the evidence in far thinner. 

One graph (p12) does show that the highest performing economies in Europe are predominantly smaller countries, though to the authors’ credit, they accept that Luxemburg should be ignored as a peculiar outlier due to its special circumstances. They also point out that smaller countries are predominantly amongst the ‘misery index’ (p14) as well. It explains this by the fact that 2 out of three countries could be described as small, so being the majority in any category isn’t particularly surprising. The argument that there isn’t a clear intrinsic cost to smallness is credible. The argument that there is a clear advantage to it however, isn’t even made, let alone proven.

So where does the 40% comes from? It only comes in at the very end of the report, and its logic is pretty astonishing. It says that there is ‘hard empirical data’ that there is a smallness premium, and this evidence is the comparison between Luxemburg and Saarland, as the former chose to be independent and the latter did not. (p63)

Here, objective inquiry seems to go out of the window. One case obviously does not prove a general trend. Particularly if that case is not only a clear outlier to be removed from the equation, but is accepted as such in the very same report.

Luxemburg is virtually a city-state of only 200,000 people, with many of its economic elites working in ‘foreign’ countries across the border. Every such job is essentially an import into the economy. Wales, with a population fifteen times greater, is to Luxemburg what Italy is to Wales. In short, very, very different. Certainly far too different to extrapolate a replicable trend, and assume Wales would have received an equal growth differential had it been independent in 1990.

Aside from the frankly absurd replication, there is the key point that if Wales was to receive the benefits of being a small corporatist state, the report would have to prove that Wales would have had both the corporations, and the effective governance, to provide this growth – not only if, but because – it was independent. Needless to say, Wales has not seen an explosion of home-made multinational corporations created since devolution, nor is the Assembly widely seen as the most efficient, effective nor dynamic of governing bodies. The assumption that independence in 1990 would have created these things is ludicrously shaky.  (As an aside, one wonders what George Monbiot – one of the party’s highest-profile supporters – makes of this urge for corporatism).

Furthermore, Plaid’s economic policy for the past two decades has not been based on turning Wales into a small corporatist state, but trying to emulate Ireland – a model this report disowns. If they had been in charge on an independent Wales since 1990, it’s clear that they would not have provided the type of economic management that this report assumes would have taken place. Neither Plaid, nor the report, comes out well from this.

Conclusion

The Welsh economy clearly needs to be rethought – radically so. There is no intrinsic reason why it cannot be a much wealthier country, and it is also clear that the prevailing thinking has failed over the past generation. This report may well spark others from different perspectives; if so, that would not only be welcomed but be its primary achievement. In its aim of proving that Wales would have been much wealthier if it was independent, it clearly doesn’t have the intellectual coherence or consistency. If Plaid – let alone Wales – was to try and build the Welsh economy on the back of it, it will surely collapse.

Free Market Socialism in public services

Procurement eh? Sexy stuff. For some reason, TV execs have overlooked the potential for a hit series on this aspect of government. Sheer tedious boredom aside however, it’s a hugely important aspect of getting decent services from taxation, and whilst public services did improve significantly under Labour, few seriously believe that the oceans of extra money was well spent, as anyone who’s read David Craig's 'Plundering the Public Sector' and 'Squandered' can testify. Nor is this a right-wing argument. Getting value for money is central to having public services; if every critique of public sector waste is dismissed as Thatcherite propaganda, the public will eventually, and inevitably, turn their back on them.

Which is why Francis Maude’s decision to centralise procurement is important. He’s found that prices paid for the same items ranging from £350 to £2000, and his solution – in quite a socialist way – is to centralise the buying process.

This centralisation is good news, though it could be made even more efficient. One of the problems of public sector buying (as in most purchases really), is that the sellers know the true price better than the buyers, because of their superior knowledge of the product. In a market with comparatively few suppliers (at least of sufficient size), competition is ‘oligopolistic’ – or in other words, close to monopoly, as all the suppliers know that by competing against each other, they’re only reducing their eventual price.

Injecting competition into the process is key to getting the best deal. A good way of doing that is by having an auction. Britain actually did this when we were selling our 3G network, and we’ll do it again with 4G network. It raised far more money than expected and it’s a model we should replicate.

The way it would work is by deciding what we want to buy centrally, and then get the suppliers to pay a nominal fee to be in the auction. Start by having a price which they all will sign up to provide the goods, and then gradually reduce it round-by-round where one-by-one, each supplier drop out. The last remaining supplier in the auction is then legally bound to provide precisely what was ordered to that price. It could be done the opposite way – with price starting low, and then rising, but behavioural psychology suggests that people (including businesses) are more reluctant to lose what they think they already have (in this case, a massive order) than gain what they do not. The nominal fee for being part of the auction will also cement their commitment to keeping in the auction for as long as possible, as no one likes spending money with nothing to show for it.

It might not be sexy, but its definitely worth a shot.

Giving Amnesty to its enemies

 Amnesty International is 50 years old. In that time of writing human wrongs, it has acquired an outstanding moral reputation matched by few. Criticising it is akin to condemning Mother Teresa. That said, as Christopher Hitchens pointed out (in his excellent, and excellently entitled, treatise, ‘The Missionary Position: Mother Teresa in Theory and Practice’), reputations deserve to assessed as much as they are valorised, and as Orwell said, saints are to be considered guilty until proven innocent. Being an unquestionable ‘good’ in the world does not mean they should avoid judgement.

When I joined Amnesty over a decade ago, it highlighted the unfairness that it was not treated as a charity (as Churches and Public Schools were), but as a political organisation. I too thought this bizarre as well as unfair. However, shortly afterwards, instead of insisting on its charitable status, it reversed course and explicitly declared itself as pursuing a political agenda, which effectively amounted to pitting itself against the Bush administration.

In condemning the outrageous abuse of a few hundred Guantanamo Bay detainees and the rendition programme, they declared it the ‘gulag of ourtimes’. The comparative hyperbole not only inflated the abuses far beyond reason and historical reality, but diminished the suffering of millions of Stalin’s victims.

The counter-argument here could be that human rights are the fundamental principles which guide us. Overstating the extent of their violation may be tactless, but forgivable in serving that ultimate good. Would that it were so.

In outlining Amnesty’s new explicitly political agenda, its Secretary General Irene Khan (who since accepted a golden-goodbye worth £533,103 – money its donators thought would be spent defending human rights) stated:

'If you look globally today and want to talk about human rights, for the vast majority of the world's population they don't mean very much. To talk about freedom of expression to a man who can't read the newspaper, to talk about the right to work to someone who has no job; human rights means nothing to them unless it brings some change on these particular issues.'

Read that paragraph again, and let it’s meaning sink in. ‘Freedom of speech won’t feed the children’ has been the standard defence of every crypto-leftist dictator for the past half century', and it's as wrong today as it was then. It is not an either/or choice.

Nick Cohen was rightly aghast that:

‘This clunking and faintly sinister statement did not come from a colonial administrator explaining that liberty was all well and good for freeborn Englishmen but the half-savage natives needed order. Nor was it a communist apparatchik saying that there was no need for bourgeois freedoms in the proletarian paradise of the Soviet Union. Nor was it Edward Heath or Henry Kissinger announcing that the Chinese liked autocracy or Abu Musab Zarqawi and Osama bin Laden denouncing democracy as a Greek heresy. [It came from] Amnesty International, an organisation which used to believe that human rights meant everything.’

It now proudly declared that they were of secondary importance.

This antipathy to the Bush administration extended not just to obscene hyperbole, but open collaboration with supporters of theocratic totalitarianism. Amnesty rightly defended the human rights of Moazzam Begg whilst he was illegally detained in Guantanamo Bay, yet well after his release, and his continuing advocacy of the Taliban, they shared a platform with him as a promoter of human rights. When its head of Gender Division Gita Sahgal pointed out that one cannot support human rights and the Taliban, Amnesty reacted swiftly – against Sahgal, and ultimately fired her. When her supporters argued that a life-long feminist human rights campaigner was more in keeping with Amnesty’s founding principles than a theocracy-supporter, they responded by smearing her, claiming she was an American stooge who denied Begg’s human rights, when she did nothing of the sort.

More recently, it announced it was giving space to Middle East Monitor Online, established by the jihadi-supporting Dr Daud Abdullah, with one of its most regular contributors denounces ‘Kikes’, and argues that ‘millions need to be sacrificed in order to redeem and deliver the Aqsa Mosque form (sic) the sinful hands of Zionism’.

Was Amnesty really established to provide a respectable platform to such ideals?

Amnesty’s supreme moral legitimacy stemmed from a core belief that human rights should not be relegated by other political aims, yet recently its leadership has proudly abandoned that principle. If it is to retain its moral supremacy for another half century, it needs to return to the noble principles of its birth, not the bankrupt pretensions of its recent custodians.

Randall on the Inflation and the Bank of England

Jeff Randal attracts the eyes and ears of many Very Important People, so his condemnation of the Bank of England deserves to be taken seriously.

His essential argument is the the 'Old Lady' has failed Britain by letting inflation rise to around 5%, whilst keeping interest rates low. His problem is that he treats all inflation as identical, and treats inflation as the be all and end all of economic objectives.

Recent inflation has been caused by weakening pound (thereby making imports more expensive) and increases such as VAT. These are temporary, whereas increasing interest rates will take 12-18 months to take full effect. They would only damage the economy which has been stagnant at best over the last six months, and teetering on the brink of recession. We are likely to be in one once the cuts take full effect (unlike the US, which has pursued a broadly, though modestly, Keynesian approach), and higher interest rates will only make things worse.

What I find odd is the belief that interest rates are somehow 'special'. All you're really doing when you're raising them is making a certain part of the economy more expensive, thereby making some people poorer, thereby reducing demand, thereby reducing prices. In other words, you're creating inflation to cut inflation.

The current inflation we have is not driven by excess demand but by rising costs, and there's no reason to assume that normal inflation will not be just as counter-inflationary in the medium term as interest-rate inflation.


Nor is it clear that 5% inflation is bad. There's actually little empirical evidence that it is, nor is single-digit inflation self-perpetuating; more often its self-negating, for the reasons I outlined above. Britain's rate of economic growth was at its highest between 1945-1970, (see here, page 23, where we went from -5% to +7%, and then from +7% to +3%) when our post-war national debt was vastly greater than ours today, and inflation was often between 5-9%.

Cutting demand during a recession makes no sense, which is why I'm hoping that Very Important People will skip Jeff today.

The Coalition Conundrum

Now that the election’s over, the big question is whether Labour will form a coalition with the Welsh Lib Dems, or go it alone. Quite a few of my fellow Lib Dems are in favour, arguing that it would be better for Wales, we’d get Lib Dem policies implemented and it will help underline the difference between the, basically centre-left Welsh party from the UK one. All in all though, I have to disagree with them.

Unlike a year ago, there is no pressing need for a coalition to be formed; Labour can go it alone, even if it is a bit awkward for them. I am convinced we’ve got better policies, and most of our AMs are of the calibre which would definitely add to the cabinet rather than weaken it. In that sense, a coalition would be good for Wales. However, policies are only so important in the Assembly if the people doing them (not just Labour ministers, but also many civil servants) are lousy – which they basically are. With two cabinet posts (one of which will be junior) I fail to see how much change we can effect on that.

Carwyn Jones may prefer the comfort of a clear majority, but the biggest problem with him and Welsh Labour is their complacency. A £600 funding gap between Welsh pupils and English ones for example should be a matter of deep shame for any party, as should the clear gap in quality of health care, despite Wales spending more per head than England. It’s true that those gaps are partly explained by the London allowance, and Wales greater rurality and health needs – though only partly.

Labour may well be forced to perform better with everyone pointing out their deficiencies – which are huge – than having a comfortable majority which enables business as usual.

As for us as a party, the case for coalition is that we get Welsh Lib Dem policies implemented, and electorally, it will help us distinguish us from the UK party, which is in broad terms, about as popular as Yasmin Alibhai Brown at a BNP rally. Personally, I fail to see any reason why the economy will get better under the coalitions ‘courageous’ policy of drastic cuts during economic stagnation, so that’ll only get worse in the years ahead

On the second point, it may distinguish us, though it could just as easily (though incorrectly) be spun as us being unprincipled harlots for ‘jumping into bed’ (in that quietly sexist phrase) with anyone to get power. The Western Mail is already asking whether ‘Carwyn and Kirsty could make a perfect couple’? Don’t expect troglodytes in Wales to avoid using any and every sexist innuendo possible to further that meme against us. 

Given how little we’re able to communicate the fact – and it is a fact – that a Con-Lib Dem coalition was the only possible option for us a year ago, I doubt very much we’ll be any more successful in putting our explanation across second time round.

Electorally, our primary strategy over the next four years has to be to keep or win Cardiff Central from Labour, Ceredigion from Plaid, and Montgomery off the Tories. Being in coalition with Labour helps us in none of these seats. Moreover, having half the group in the cabinet (and the best half at that) will mean that they will have far less time (to say nothing of political space) to strengthen the party and to campaign for better government. Kirsty is clearly a huge asset to us – perhaps one of the few we have – but her being in the cabinet will blunt that asset massively.

Furthermore, this will be an unpopular government. Not just because it will have to implement cuts (which Labour will blame on us, whether we’re in coalition with them or not), but if it’s going to be vaguely decent and put national interest before party interest, it will have to do unpopular things. One being reconfiguring some District General Hospitals – its unlikely that having big hospitals in Llanelli, Swansea (twice) and Port Talbot is the best allocation of resources. Another is university funding.

The Labour-Plaid policy is very popular, and also fundamentally terrible. Limiting fees to £3,300 for Welsh Universities will mean they have far less money than their English counterparts. Furthermore, the policy of subsidising fees for Welsh students to study outside of Wales, paid for by cutting the Welsh Universities teaching budget will not only mean Welsh Universities lose money (again). They also will essentially subsidise English Universities, and encouraging the best Welsh students to leave Wales (to get a degree worth £27,000 instead of £10,000, for the same price), with predominantly less gifted and less committed English students coming to Wales in return – if they come at all. The best academics will inevitably avoid Wales – which seeing how much hope we’re placing on Higher Education to develop our economy, will only damage us all.

Any decent government will have to remove this very popular policy. If we were in coalition, either we get rid of it – and thereby cementing the charge of betraying students even more – or keep with it to keep some popularity, whilst more of us realise how fundamentally bad it really is. If the argument behind a Lab-Lib coalition is the national interest, then the latter course will not be possible. Labour created a terrible policy which they knew was unsustainable, just so they and Plaid can beat us in seats like Cardiff Central and Ceredigion. They’ve dug Wales into a hole – perhaps even a grave for Welsh Universities. Seeing as we bore the political brunt of Labour digging the hole, I don’t see why we should volunteer to bear the brunt again for them getting out of it.

Last, though definitely not least, there’s the will of the people. Determining what election results mean is not an exact science. That said, it’s clear that they want Labour to have more power than they had with the Lab-Plaid coalition. It’s also pretty clear that they’re not calling for us to be in power. Labour have enough seats to form a government. If it’s an uncomfortable one for Carwyn Jones, then frankly, good. He, and Welsh Labour more generally, have been far too complacent, consistently caring more about being in power than being in government. Being on their own with 30 seats will either finally shake them out of their complacency, or clearly expose the truth of how bad they really are. It’s not in our interest, nor in Wales’ interest, to prevent either of these things from taking place.